roundtable on sustainable palm oil...qmf: rspo-007a-13(rev.0) 1.5 dates of plantings and replanting...

Roundtable on Sustainable Palm Oil Public Summary Report

Report no.: 18502793 001

Certification assessment against the

RSPO Principles & Criteria Indonesia National Intepretation (INA-NI) year 2008 and RSPO SCCS year 2011

PT Dharma Satya Nusantara

Palm Oil Mill 3

Head Office : Jl. Rawa Gelam V Kav. OR/3B, Kawasan Industry Pulo Gadung Jakarta

Site Office: Benhes Village, Muara Wahau Sub District, Kutai Timur District east Kalimantan, Indonesia

Date of assessment : August 26 to 31, 2013

Report prepared by:

Dian Susanty Soeminta (RSPO Lead Auditor)

Certification decision by: Nelly Yong

(Managing Director of TUV Rheinland Malaysia)

Certification Body: TUV Rheinland Malaysia Sdn. Bhd.

No. 26 – 32, Jalan Perindustrian USJ 1/6, Taman Perindustrian USJ 1,

47600 Subang Jaya, Selangor Darul Ehsan, Malaysia.

Tel: +6 03 8024 2400 Fax: +6 03 8023 1505

www.tuv.com

TABLE OF CONTENTS

1.0 SCOPE OF CERTIFICATION ASSESSMENT ........................................................ 3

1.1 National Interpretation Used 3 1.2 Type of Assessment 3 1.3 Location and Maps 3 1.4 Description of Supply Base 6 1.5 Dates of Plantings and Replanting Cycles 7 1.6 Other Achievements and Certifications Held 7 1.7 Area of Plantation (Total, Planted and Mature) 7 1.8 Organisational Information / Contact Person 8 1.9 Description of Company History, Socio-economy & Environment 8 1.10 Time Bound Plan for Other Management Units 9 1.11 Compliance to Rules for Partial Certification 9 1.12 Plan for certification of associated smallholders 11 1.13 Approximate Tonnages Certified 11 1.14 Recommendation for Certification 11 1.15 Date of Certificate Issued and Scope of Certificate 11

2.0 ASSESSMENT PROCESS .................................................................................... 12

2.1 Certification Body 12 2.2 Qualifications of Lead Assessor and Assessment Team 12 2.3 Assessment Methodology 13 2.4 Stakeholder Consultation and Stakeholders Contacted 15 2.5 Date of Next Surveillance Visit 16

3.0 ASSESSMENT FINDINGS .................................................................................... 16

3.1 Summary of Findings 16 3.2 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions 43 3.3. Description of Supply Chain Management System 44 3.4 Issues Raised by Stakeholders and Findings Pertaining to Issues 47 3.5 Noteworthy Positive Components 48 3.6. Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 49

APPENDICES .............................................................................................................. 50

Appendix 1: Details of Certificate 50 Appendix 2: Certification Audit Plan 52 Appendix 3: List of Abbreviations 59 Appendix 4: List of Stakeholders Interviewed and Contacted 60 Appendix 5: Observations and Opportunities for Improvement 62

RSPO Certification Assessment Report

- PT Dharma Satya Nusantara Palm Oil Mill 3, PT Dharma Intisawit Nugraha Plantation, PT Dewata Sawit Nusantara Plantation

East Kutai - East Kalimantan -

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QMF: RSPO-007a-13(Rev.0)

1.0 SCOPE OF CERTIFICATION ASSESSMENT

1.1 National Interpretation Used

The operations of the palm oil mill(s) and its supply base of FFB were assessed against the National Interpretation Indonesia year 2008 of the RSPO Principles & Criteria and the RSPO Supply Chain Certification Systems (SCCS) document (November 2011).

1.2 Type of Assessment

The main certification assessment was carried out on one mill, i.e. PT Dharma Satya Nusantara Palm Oil Mill 3 and and 7 (seven) estates under PT Dewata Sawit Nusantara owned by Dharma Satya Nusantara Group.

1.3 Location and Maps

Table 1: GPS locations for all estates and mills included in certification assessment

Name of mill / es-tate

Location GPS locations

Latitude Longitude Palm Oil Mill 3, PT Dharma Satya Nusanta-ra

Muara Wahau Village, Muara Wahau subdistrict, Kutai Timur Regency, East Kalimantan Prov-ince, Indonesia

01 15’ 21.7” N 116 52’ 29.1” E

PT Dewata Sawit Nusantara

Melenyu 1 estate Benhes, Dabeq & Diak Lay Vil-lage, Muara Wahau subdistrict, Kutai Timur Regency, East Ka-limantan Province, Indonesia

01 15’ 38.4” N 116 52’ 55.2” E

Melenyu 2 estate 01 17’ 20.2” N 116 46’ 12.5” E

Melenyu 3 estate 01 16’ 51.9” N 116 43’ 26.8” E

Melenyu 4 estate 01°18'29.116"N 116°47'9.919"E

PT Dharma Intisawit Nugraha

Long Kejiak 1 estate Muara Wahau Village, Muara Wahau subdistrict, Kutai Timur Regency, East Kalimantan Prov-ince, Indonesia

01 09’ 29.9” N 116 51’ 26.5” E

Long Kejiak 2 estate 01 13’ 04.5” N 116 53’ 12.6” E

Long Kejiak 3 estate 01 16’ 30.2” N 116 48’ 58.1” E




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Figure 1. Location of PT Dharma Satya Nusantara in East Kalimantan, Indonesia




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Figure 2. PT Dharma Satya Nusantara Palm Oil Mill, PT Dharma Intisawit Nugraha, PT Dewata Sawit Nusan-

tara Plantation in East Kalimantan, Indonesia


PT Dharma Intisa‐wit Nugraha

Mill 3 (LK 3 block H 50)

Capacity: 2x30 Ton/Hr

PKS 3




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1.4 Description of Supply Base

Table 2: FFB Supply Information for PT Dharma Satya Nusantara Palm Oil Mill 3, Period year 2012 and

year 2013

FFB Contributors FFB supplied (year 2012) FFB supplied (year 2013)*

Tonnes % Tonnes %

Company owned (certified) es-tates :

Melenyu 1 (ME1) Estate 2,779.53 0.88 4,075.38 2.10

Melanyu 2 (ME2) Estate 12,262.64 3.86 17,979.61 9.25

Melanyu 3 (ME3) Estate 1,308.01 0.41 1,917.82 0.99

Melenyu 4 (ME4) Estate** - - - -

Long Kejiak 1 (LK1) Estate 77,470.99 24.42 48,896.44 25.16



Sub Total 219,317.51 69.12 159,458.31 82.06

DSN Group estate (certified source):

PT Dharma Agrotama Nusantara 35,031.89 11.04 19,469.74 10.01

PT Swakarsa Sinarsentosa 56,656.39 17.86 6,598.46 3.40

Sub Total 91,688.28 28.90 26,068.20 13.41

Smallholder (KM 3) : 6,290.63 1.98 8,805.77 4.53

TOTAL 317,296.42 100.00 194,332.28 100.00

* FFB received from January to July 2013

** Melenyu 4 still under developing (ongoing planting)

Table 3: CPO and PK production from PT Dharma Satya Nusantara mill (POM 3) in year 2012 & year 2013

FFB Contributor FFB sup-

plied ( Tonnes )

FFB Pro-cessed

(Tonnes)

OER (%)

CPO (Tonnes)

KER (%)

PK (Tonnes)

Year 2012

Company owned estates: 219,317.51

317,079.92 24.98 79,205.72 3,08 9,772.67 DSN Group estate 91,688.28

Smallholders 6,290.630

TOTAL 317,296.05

Year 2013 (January-July)

Company owned estates: 159,458.31

194,188.00 24.86 48,275.00 2.62 5,097.00 DSN Group estate 26,068.20

Smallholders 8,805.77

TOTAL 194,332.28




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1.5 Dates of Plantings and Replanting Cycles

The company follows a replanting cycle of 25 years. Information on the dates of plantings is as per the table below. During main certification audit, no planned and actual oil palm replanting activities for PT Dewata Sawit Nusantara (PT DWT) and PT Dharma Intisawit Nugraha (PT DIN) have been carried out since 1st planted in PT DIN in year 2005 and PT DWT in year 2007. Table 4: Age and year of plantings of company estate supplying to PT Dharma Satya Nusantara mill 3

Age & Year of Plantings

Oil palm planted area at each estate (ha)

ME1 ME2 ME3 ME4 LK1 LK2 LK3 Total

0 – 5 yrs (2008 – 2013)

2,685 3,219 2,662 682 - 86 1,071 10,405

5-10 yrs (2002 – 2007)

- 59 - - 2,930 2,831 1,831 7,651

TOTAL 2,685 3,278 2,662 682 2,930 2,917 2,902 18,056

1.6 Other Achievements and Certifications Held

Table 5: Details of other certifications or awards held by PT Dharma Satya Nusantara mill (POM 3), PT

Dharma Intisawit Nugraha and PT Dewata Sawit Nusantara

Name of mill / es-tate

Certification Standard / Award achieved

Certification Body /

Awarder

Date Achieved

PT Dharma Satya Nusantara Palm Oil 3

QMS 9001:2008 SGS 21 Mar 2011 PT Dharma Intisawit Nugraha PT Dewata Sawit Nusantara

1.7 Area of Plantation (Total, Planted and Mature)

Table 6: Oil Palm Planted Area Summary, FFB Production and Average yield/ha for PT Dharma Intisawit Nugraha and PT Dewata Sawit Nusantara year 2012

Estate Name Total area

(ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Production

(tonnes)

Average yield/ ha

PT Dharma Intisawit Nugraha Long Kejiak 1 3,225 2,930 2,930 - 80,599.57 27.51 Long Kejiak 2 3,498 2,917 2,917 - 70,636.57 24.22 Long Kejiak 3 3,074 2,902 2,902 - 61,075.49 21.05

Sub total 9,797 8,749 8,749 - 212,311.63 24.27PT Dewata Sawit Nusantara

Melenyu 1 3,569.10 2,685 655 2,030 9,813.32 14.98 Melenyu 2 3,848.61 3,278 3,116 162 43,922.92 14.10 Melenyu 3 3,505.54 2,662 1,234 1,428 4,944.29 4.01 Melenyu 4 2,706.25 682 - 682 - - Sub Total 13,629.50 9,307 5,005 4,302 58,680.53 11.72




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Table 7: Land use data for PT Dharma Satya Nusantara POM 3

Estate Name Total area

(ha)

Oil Palm Planted

Area (ha )

HCV/

Potential HCV

areas* (ha)

Land used for other purposes (ha)

Building Road Nursery Other Land


Long Kejiak 1 3,225 2,930 177 55 63 - -

Long Kejiak 2 3,498 2,917 469 48 64 - -Long Kejiak 3 3,074 2,902 - 48 94 - -

Sub total 9,797 8,749 646 151 221 - -


Melenyu 1 3,569.10 2,685 244.13 19 75 - 545.97 Melenyu 2 3,848.61 3,278 409.61 26 81 54 - Melenyu 3 3,505.54 2,662 624.84 24 57.70 137 Melenyu 4 2,706.25 682 1,465.00 14 45.25 500 Sub Total 13,629.50 9,307 2,743.58 83 258.95 54 1,182.97

1.8 Organisational Information / Contact Person

Contacts details of the company are as follows:

1.9 Description of Company History, Socio-economy & Environment

Table 8: General Information on Estates under PT Dharma Intisawit Nugraha and PT Dewata Sawit Nusantara

No. Description PT Dharma Intisawit Nugraha Plantation and palm Oil Mill


1. Location of administrative offices Government

Administration office Kutai Timur District Kutai Timur District

Plantation Administration office

Kutai Timur Kutai Timur

Company Name: PT Dharma Satya Nusantara Palm Oil Mill 3

RSPO Membership no. 1-0135-12-000-00

Address: Head Office

Jl. Rawa Gelam V Kav. OR/3B, Kawasan Industry Pulo Gadung Jakarta

Site Office:

Benhes Village, Muara Wahau Sub District, Kutai Timur District east Ka-limantan, Indonesia

Contact Person: Mr. Tjahjono Notosuroto

Telephone: +62 21 4618135 Fax: +62-21-4606942

Email: [email protected]

Mill capacity 60 Mt/hour




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No. Description PT Dharma Intisawit Nugraha Plantation and palm Oil Mill


2 Surrounding stakeholders (at estate boundaries) North PT Dewata Sawit Nusantara Forest Consession Permit (’Hak

Pengusahaan Hutan ’or HPH) area of Gunung Gajah Abadi

East Wahau River, Miau Baru Village, Muara Wahau

Wahau River, Miau Baru Village, Muara Wahau

South PT Dharma Agrotama Nusantara ; PT Swakarsa Sinar Sentosa

PT Dharma Intisawit Nusantara and PT Dharma Agrotama

West Telen River Telen River 3. Total Area (ha) 8,749 13,629.50 4. Land Condition Sloping to undulating Sloping to undulating 5. Soil type Red and Yellow Podzolic Red and Yellow Podzolic 6. Hydrology Telen River Telen River 7. Climate Wet tropic Wet tropic 8. Topography Flat 3- 25% Flat 3- 25%

1.10 Time Bound Plan for Other Management Units

The time frame laid out below is considered to be both challenging and realistic. This time bound plan has so far been carried out according to plan. The audit team is satisfied that the company conforms to the RSPO requirements for partial certification as laid out in Clause 4.2.4 of the RSPO Certification Systems document. Table 10: Time Bound Plan of Dharma Satya Nusantara Group

Name of Holding Location Time bound

plan for certification

Status

PT Dharma Satya Nusantara Mill 2 ; Supply base: PT Dharma Agrotama Nusantara

Muara Wahau, east Kaliman-tan

June 2013 Certification Audit completed

PT Dharma Satya Nusantara Mill 3 Supply base: - PT Dharma Intisawit Nugraha - PT Dewata Sawit Nusantara

Muara Wahau, East Kaliman-tan

August 2013 Certification Audit completed

PT Dharma Satya Nusantara Mill 5 Supply base: - Pilar Wanapersada

Nangabulik, Central Kali-mantan

June 2014 Preparing for certifica-tion

PT Dharma Intisawit Lestari Bulungan, East Kalimantan

2019 Preparing for certifica-tion

PT Karya Prima Agro Sejahtera Muara Wahau, East Kaliman-tan

2016 Preparing for certifica-tion

1.11 Compliance to Rules for Partial Certification

Compliance of the uncertified management units of PT Dharma Satya Nusantara Group against the rules for par-tial certification according to RSPO Certification System clause 4.2.4 was assessed by document check self assesment result and the result was submitted on July 03, 2013 and onsite verification. A summary of findings is as stated below.

Partial Certification Requirements Audit Findings

(a) The parent organization or one of its ma- Dharma Satya Nusantara group is RSPO member




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jority owned and / or managed subsidiaries is a member of RSPO.

since year 2013 with RSPO membership number 1-0135-12-000-00

(b-d) A challenging time-bound plan for certi-fying all its relevant entities is submitted to the Certification Body (CB) during the first certification audit. The time-bound plan should contain a list of subsidiaries, estates and mills.

Any revision to the time-bound plan or to the circumstances of the company shall cause the plan to be reviewed. for whether it is still appropriate, such that changes to the time-bound plan are permitted only where the or-ganisation can demonstrate that they are justified

The company has made a timebound plan and re-ported to RSPO as determined on the table

(e) No replacement of primary forest or any area identified as containing High Conserva-tion Values (HCVs) or required to maintain enhance HCVs in accordance with RSPO criterion 7.3. Any new plantings since Janu-ary 1st 2010 must comply with the RSPO New Plantings Procedure

There is no evidence that company replaces prima-ry forest for they all plantation area. According to Indonesia Goverment regulation, plantation areas cannot be established in primary forests, but con-version of forest area or non forest area as well as non productive area, land bank and other catego-ries of land are permitted as decided by the gov-ernment Ministry of Forestry Decree letter no. 70/KPTS-II/2001.

All plantation areas in PT Dharma intisawit Nugra-ha were established in between year 2005 to 2007, and according to HCV assessment results there were HCV areas cleared i.e Riparian river along to Telen in Long Kejiak 2 estate. The company has identified the area and will follow RSPO regulation regarding compensation rule.

There is new development area in PT Dewata Sawit Indonesia, NPP assessment was done on August 2012 and the report available and can be verified at the main audit time for PT DSN Palm Oil Mill 3.

(f) Land conflicts, if any, are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Set-tlement Facility, in accordance with RSPO criteria 6.4, 7.5 and 7.6.

There was identified land dispute between PT Dharma Agrotama Nusantara (another plantation under PT DSN) with a villager from Puhus village, the dispute has been closed since management PT DSN group make agreement with villager in Puhus village.

Land conflict in PT Dhama Intisawit Lestari and PT PT Karya Prima Agro Sejahtera. Company can showed land conflict resolution progress.

(g) Labour disputes, if any, are being re-solved through a mutually agreed process, in accordance with RSPO criterion 6.3.

There is no labour dispute identified within DSN group

(h) Legal non-compliance, if any, are being resolved in accordance with the legal re-quirements, with reference to RSPO criteria 2.1 and 2.2.

Some legal non compliance have been identified as stated on the NCR list of this report, and for oth-er companies under DSN group such as PT DSN Mill 2, PT Swakarsa Sinar sentosa, the companies have been audited, some legal noncompliances have been identified and stated in the audit reports for these companies.




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1.12 Plan for certification of associated smallholders

As seen from data in Table 2, the mill receives around 4.5% supply of FFB from a smallholder groups, named Partnership 3 (Kemitraan 3 or KM3), and these smallholders are associated with the mill. The company man-age community land for the smallholder’s plantation, and all FFB from the smallholder’s plantation is sent to the mill.

The mill has developed a plan for certification of associated smallholders as seen on document “RSPO Certifi-cation Program for Smallholder Supply Base of Mill 3, the program will be starting on September 2013. As de-termined in the plan, the program towards to RSPO certification will begin in year 2015, i.e. Understanding of RSPO requirement, preparation for RSPO requirement compliances will begin on year 2014 and target for certi-fication by the end of year 2016.

1.13 Approximate Tonnages Certified

The approximate tonnages certified, based on projected production in 2013 for company’s owned estates and other certified estates under PT DSN group are as follows:

Crude Palm Oil (CPO) : 82,952 Palm Kernel (PK) : 10,572

1.14 Recommendation for Certification

PT Dharma Satya Nusantara Palm Oil Mill 3 has established and maintains an effective system to ensure com-pliance with the RSPO principles and criteria. The audit team has confirmed through the audit process that the company’s practices complies with, adequately maintains and implements the requirements of RSPO Principles and Criteria National Intepretaion Indonesia (INA-NI) year 2008 and RSPO Supply Chain Certification System (SCCS), November 2011. TUV Rheinland Malaysia Sdn. Bhd. recommends that PT Dharma Satya Nusantara Palm Oil Mill 3 be approved as a producer of RSPO Certified Sustainable Palm Oil.

1.15 Date of Certificate Issued and Scope of Certificate

The scope of the certificate covers production of palm oil from PT Dharma Satya Nusantara Palm Oil Mill 3 and its supply base, which includes PT Dharma Intisawit Nugraha (Long Kejiak 1 estate, Long Kejiak 2 estate and Long Kejiak 3 estate) and PT Dewata Sawit Nusantara (Melenyu 1 estate, Melenyu 2 estate, Melenyu 3 estate and Melenyu 4 . The date of certificate issued is 25 March 2015. Further details of the certificate are as per Appendix 1.




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2.0 ASSESSMENT PROCESS

2.1 Certification Body PT TUV Rheinland Malaysia is a member of TÜV Rheinland Group, a global leader in independent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 500 loca-tions in 65 countries on all five continents. TUV Rheinland Malaysia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, as well as CDM Validations and Verifications. PT TUV Rheinland Malaysia office is located in Subang Jaya, Malaysia.

2.2 Qualifications of Lead Assessor and Assessment Team

Name Position Qualifications / Experience

Dian S. Soeminta

Lead Au-ditor

Education: Bachelors Degree in Forestry - Bogor Agriculture Institute. Indo-nesia, (1990 to 1995). Trainings attended: ISO 9001:2000 lead assessor course 1996 - Neville Clark; ISO 14001 lead assessor course - PE International; OSHAS: 2007 training, Sustainable Forest Management (SFM) - Forest Stewardship Coun-cil (FSC) system training; Chain of Custody training for FSC System. RSPO lead Auditor training year 2010 by Pro Forest and Wild Asia. SCCS training by David Ogg Consulting. ISPO Lead Auditor training Working experience: Professional forester since 1995 to 2000. Lead Audi-tor for Forest Stewardship Council (FSC), Sustainable Forest Certification (SFC) and Chain of Custody (COC) Certification. Lead auditor for Environ-mental Management System (EMS) and Quality Management System (QMS) audits. Conducted sustainable forest management certification audits on FSC and Indonesian Ecolabel Institute (Lembaga Ecolabel Indonesia - LEI) standards for 20 companies, 50 COC FSC/LEI audits, and EMS and QMS audits at more than hundred companies for TUV Rheinland Indonesia. In-strumental in the preparation of TUV Rheinland Indonesia for Sustainable Forest Management Certification System and TUV Rheinland Malaysia for RSPO Certification. Member of Task Force for Indonesian National Interpre-tation (Guidance on scheme smallholder RSPO certification). Developed TUV Rheinland RSPO Gap Assessment Checklist and report template.

Fadli Auditor

Education: Bachelor of Anthropology, Department of Anthropology - Univer-sity of Indonesia, Jakarta. Trainings attended: Sustainable Natural Production Forest Management (Pengelolaan Hutan Alam Produksi Lestari - PHAPL) assessor training (May 2003); Forest Plantation Management (August 2003) training - Indonesian Ecolabel Institute (LEI), Forest Management and Agriculture Auditor Train-ing; ISO 9001:2008, ISO 14000:2004, OHSAS 18001:2007 trainings - Smartwood/Rainforest Alliance; SA8000 training - SA International; RSPO Lead Auditor Training -Indonesian Palm Oil Commission. Working experience: Experienced as lecturer for D3 Tourism program, University of Indonesia. Social aspect auditor of PT. TUV International Indo-nesia for Sustainable Forest Management and RSPO Principles & Criteria. Researcher of stakeholder mapping for CSR Indonesia.

Aswan Ha-sibuan

Auditor

Education: Bachelor of Agriculture, University of North Sumatera. Trainings attended: ISO 9000:2000 Series Auditor / Lead Auditor Training - PE International (Jakarta), IEMA Advanced EMS Auditor (IEMA / EARA ISO 14001) Auditor / Lead Auditor Training Course - PE International (Ja-karta), OHSAS 18001 Lead Auditor Training Course - PE International (Ja-karta). Working experience: Experienced in Quality Control from 1994-2004. Au-ditor for Quality Management System since 2004 – present. Auditor for En-




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Name Position Qualifications / Experience

vironmental Management System since 2005 – present. Auditor for OHSAS 18001 since 2007 - present. Conducted over 100 Quality Management System audits since 2004, over 50 Environmental Management System audits since 2006 , and over 25 OHSAS audits since 2007

Hendra Fachrurozy

Auditor

Education: Bachelors Degree in Forestry - Bogor Agriculture Institute. Indo-nesia, (1995 to 2000). Trainings attended: ISO 9001 : 2008 lead auditor course - Neville Clark (2011), ISO 14001 : 2004 lead auditor course - TUV Rheinland Indonesia (2011), SMK3 auditor course – Department of manpower and transmigration of the Republic of Indonesia (2009), Sustainable Forest Management (SFM) – Forestry Education and Training Centre (2010), Timber Legality of Verifica-tion - Forestry Education and Training Centre (2010), RSPO Lead Auditor Course – Pro Forest & Wild Asia (2011). Working experience: Experienced as Junior Consultant at PT Surveyor In-donesia (2002 s/d 2010), assesor for SFM –mandatory (PHPL & PHTL), as-sessor for industry performance assessment (IPHHK)-mandatory, auditor for Timber Legality of Verfication, auditor for SMK3, auditor for QMS and EMS at TUV Rheinland Indonesia and auditor for RSPO at TUV Rheinland Indone-sia.

Carol Ng RSPO auditor

Education: Bsc. Biotechnology & Bsc. Environmental Management - Monash University.

Trainings attended: RSPO Malaysian National Interpretation Requirements and Certification – SIRIM; Implementation of RSPO Principles & Criteria - Plus; RSPO Stepwise Support Programme; 2nd Biodiversity Seminar – RSPO; Certification Body Biodiversity Forum & Workshop – RSPO; Envi-ronmental Quality Act 1974 (DOE) and ISO9001:2008 QMS Conversion Re-quirements (TUV Rheinland). Working experience: Experience in implementing sustainable practices in Sime Darby plantations to comply with RSPO requirements, performing RSPO internal audits and implementing sustainability projects. Prepared training materials and conducted several RSPO requirements trainings and workshops to plantation management teams (2008).

M. Fundy Cholis

Trainee Auditor

Education: Bachelor Degree in Animal Science – Brawijaya University. In-donesia, (2002 to 2006); Master Degree in Natural Resouce and Environ-mental Management – Bogor Agriculture University (2007 to 2009). Training attended: Environmental Impact Management (EIA) (2009), Eco-logical Risk Assessment (ERA) (2009), Internal Quality Audit Training for Quality Management System (2011), High Conservation Value Training (HCV) (2011). Working experience: Experienced at EIA Consultant as Environmental Ex-pert at PT Centra Multicon Jaya (April 2010 to November 2010), Environmen-tal Health and Safety Senior Staff (EHS Senior Staff) at Wilmar International Plantation, As a internal auditor for RSPO, ISCC, HCV for all Member Com-pany of Wilmar International Plantation for 7 (seven) Companies in Sumatera Region (2011 to 2012), Preparation Management Plant of HCV and SIA for New Planting Procedure PT AIP Bangko (Member of Wilmar) (2011), Prepara-tion of HCV Detail Action Plan at PT BCP (Member of Wilmar) (2011), and Auditor for RSPO and ISPO at TUV Rheinland Indonesia.

2.3 Assessment Methodology The certification assessment was conducted betwen August 26 to 31, 2013 as per the assessment program below. The assessment was carried out in accordance with PT TUV Rheinland Malaysia’s RSPO audit procedure as well




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as the RSPO Certification Systems document. During assessment, the qualified TUV Rheinland assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings. Due to the location and proximity of the estates, combined with common management systems, it was possible to carry out both field and document assessments of all estates and the mill within the time frame without compromis-ing the integrity of the assessment in anyway. All estate and mill (7 estates and 1 mill) were visited and the assessment team carried out field and document as-sessments of compliance to all the RSPO principles and criteria. Common systems were identified and specific ev-idence was recorded for individual estates. Interviews were conducted at all estates and the mill. The company proposed the correction and corrective action for all identified non conformities raised to the certifi-cation body 30 days after the closing meeting. The certification assessment agenda is as explained below. Main Assessment Agenda.

Date Location/ Main

sites Main activities

26/8/2013 Head office Opening meeting Document check

27/8/2013 PT Dharma Inti-sawit Nugraha Plantation

Document check On-site visit: Erosion area at block F14 of LK1 estate; Workers housing and PPE washing area LK1 estate; EFB application at Block F9; Landfills for do-mestic organic and inorganic wastes; River water sampling point at block H12 of LK1 estate; LK1 estate chemical store and fertilizer store; LK1 estate land application block at H48 and control block at H49; HCV area in Melenyu 4 es-tate; Land clearing on Block D47 Melenyu 4 estate; Terrace application on hilly slope Block C62 Division 18, Melenyu 4 estate; Cover crops “Mucunan bracteata” realization for new planting activities in Melenyu 4 estate; Spraying activities in Block G46 Division 12, Melenyu 2 estate; Harvesting activities and IPM in Block F45 Division 2, Melenyu 2 estate; Riparian buffer zone in Block F31, G31 Division 13, Melenyu 3 estate; Spraying activities in Block E25 Division 15, Melenyu 3 estate; Housing and hazardous warehouse in Block F26 Dvision 15, Melenyu 3 estate; Harvesting activities and realization beneficial plant in Block 27/28 Division 15, Melenyu 3 estate; Chemical house in Melenyu 3 estate; Fertilizer warehouse in Melenyu 3 estate; Chemical house in Block F51 Division 10, Melenyu 2 estate; Riparian bufferzone in Block E2 Division 16, Melenyu 3 estate

28/8/2013 PT Dewata Sawit Nusantara

Document check On-site visit:

- Erosion monitoring points at block F28 (at a road) and block G31 (adjacent to river)

- ME1 estate, Division 4 workers housing and PPE washing area - ME1 estate clinic - ME1 estate chemical store, hazardous waste store and workshop

Document check for verification data from field observation on 27/08/2013 for record of spraying activities, record of harvesting activities, management of riparian bufferzone protection, chemical handling, safety and health for spray-ing and harvesting activities, IPM and beneficial plant documentation such as map of realization beneficial plant, maintainance of beneficial plant, record of early warning system (EWS), record of emergency response training, first aid training




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2.4 Stakeholder Consultation and Stakeholders Contacted

The stakeholder consultation involved both external and internal stakeholders. External stakeholders were notified to make comments on the certification assessment by placing an invitation to comment on the RSPO website. Stakeholders included those immediately linked with the operation of the company such employees, outgrowers, the local government, NGO’s, trade and labour unions and local communities.

Stakeholder consultation took place in the form of meetings and interviews. Meetings with stakeholders were held to seek their views on the performance of the company with respect to the sustainability practices outlined in the RSPO Principles & Criteria, and to comment on aspects where improvements could be made. Meetings with local communities were held at their respective premises within and near the company’s area. A stakeholder consulta-tion meeting was also held at Sangata on August 29, 2013. Letters inviting individual stakeholders to the stake-holder consultation meeting were prepared and sent to the individual stakeholders, while electronic mail and tele-phone calls were made to arrange the meetings.

In all the interviews and meeting, the objectives of the RSPO and the purpose of the assessment was clarified at the outset followed by an evaluation of the relationship between the stakeholders and the company before discus-sion proceeded to obtain the stakeholders feedback on the company’s compliance to different aspects of the RSPO Principles & Criteria. Although several stakeholders were not familiar with RSPO but they agreed with its objective and expressed their willingness to collaborate in the promotion of sustainable palm oil in East Kalimantan province. In all interviews and meeting, the assessment team did not restrict discussion of both the positive and negative aspects of operations conducted by PT Dharma Intisawit Nugraha, PT Dewata Sawit Nusantara estates and PT Dharma Satya Nusantara Palm Oil Mmill.

The stakeholder consultation meeting held with stakeholders during the audit was extensive and productive, with an attendance of more than 20 of attendees. This was followed by site inspections, including visits to the local communities, interviews with land claimants and contractors, and inspections of worker amenities and infrastruc-ture. All stakeholder issues raised were recorded and forwarded to the management for their written reponse, and

Date Location/ Main

sites Main activities

29/8/2013 PT Dharma Inti-sawit Nugraha and PT Dharma Satya Nusantara (Mill 3)

Document check Mill site visit:

- Security post - Loading ramp - Weighbridge - General mill compound - Fat pit and sedimentation pond - Palm oil mill effluent ponds - Hazardous waste store - Fuel, oil and lubricant storage area - Workshop

Document check for verification data from field observation on 27/08/2013 for record of spraying activities, record of harvesting activities, management of riparian bufferzone protection, chemical handling, safety and health for spray-ing and harvesting activities, IPM and beneficial plant documentation such as map of realization beneficial plant, maintainance of beneficial plant, record of EWS, record of emergency response training, first aid training.

30/8/2013 PT Dewata Sawit Nusantara

Site visit to Melenyu 4 estate - Observation of fire simulation conducted on site - Check of fire fighting facilities - New planting area

Document check for verification data from field observation on 27/08/2013 for record of spraying activities, record of harvesting activities, management of riparian bufferzone protection, chemical handling, safety and health for spray-ing and harvesting activities, IPM and beneficial plant documentation such as map of realization beneficial plant, maintainance of beneficial plant, record of EWS, record of emergency response training, first aid training. Closing meeting




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this is summarized in Section 3.4.The list of stakeholders that attended the stakeholder consultation meeting and stakeholders interviewed during the assessment is included as Appendix 4.

2.5 Date of Next Surveillance Visit

The next surveillance visit is planned for January 2015.

3.0 ASSESSMENT FINDINGS

3.1 Summary of Findings

During the certification assessment, 2 (two) nonconformities were assigned against Minor Compliance Indicators, 20 observations or opportunities for improvement were identified. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in Section 3.2. The observations & opportunities for improvement are listed in Appendix 5.

The following is a summary of findings made for the criteria listed in the RSPO Principles & Criteria National In-tepretation Indoneisa.

Criterion 1.1: Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation in decision making.

Findings: Requests for information made by stakeholders at the palm oil mill and the estates were recorded in one document together with any other requests or letters received from stakeholders, as required by the compa-ny’s procedure SOP 025B/SWA-CSR-WHU-/VI/2012 regarding external communication & complaints han-dling procedure issued on April 23, 2012. As seen from the company’s log book, there are some records of requests of information with corresponding responses from the company, as follows: - Incoming letter from general Election committee Muara Wahau Village dated may 31, 2013 regarding pro-

file of company’s workers under DSN group. It was responded to by the company on June 02, 2013 with evidence sighted from transmital notes.

- Incoming letter from head of sub District Muara Wahau requesting monthly employee data, first letter on February 2013, it was responded to on March 21, 2013 with employee data for period of January to Febru-ary 2013. Updates on employee information was provided at later dates as seen from transmittal notes dated May 28, 2013 with employee data for period March – April 2013, and transmittal notes on July 18, 2013 with employee data for period May to June 2013.

It is mentioned in company’s document namely “time provision of document storage (Ketentuan Waktu Penyimpanan Dokumen)” (FM-STD-18-R00”, that the company shall maintained all records of requests for information and responses made by the company for at least 3 years. Evidence so far shows that company maintains these records in accordance with this procedure. Compliance status: Full Compliance

Criterion 1.2: Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmen-tal or social outcomes.

Findings: The company makes their management documents publicly available to stakeholders, as stated on the pro-cedure, the document include Legal Land titles/user rights, Site Permit, Plantation Operation Permit, Land Use Title or other documentation relating to application for Land Use Title in accordance with relevant pro-cedures), Environmental: Environmental and Social Impact Assessment (AMDAL /UKL-UPL) and environ-mental management and monitoring reports (Laporan RKL-RPL); Documentation of social activities and community programs; Health and Safety Plan and Company’s improvement plan, the company has com-




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municated to local communities during meeting dated June 01, 2012 attended by representative from 6 vil-lages which are Benhes village, Desa Diak Lay village, Deabeq village, Nehas Liah Bing village, Mura Wahau village, Miau Baru Village. The company’s documents that can be accessed by the public as stated in the company’s procedure are 19 categorized documents such as the company’s vision and mission, Environmental Management Document, environmental management and monitoring reports (‘laporan RKL/RPL’), the company annual reports, company policies, copies of licenses, monthly mill and estates operational reports, area statements, soil maps, hydrology maps, topography maps, maps of estate and village boundaries, traditional rights areas, estate and mill procedures, company organization structure, high conservation value (HCV) reports and management plans, social impact assessment (SIA) report, corporate social responsibility (CSR) planning and report including company Community Development program, etc. However, the company has still not informed to other stakeholders such as suppliers, local institutions, non-government organizatons (NGOs) and other relevant stakeholders regarding documents that can be accessed, even though management in-formed that all documents will be attached on the company’s website. The company has a procedure to maintain records of information requested and responded to for a mini-mum of 3 years. Compliance status: Compliance with observation.

Criterion 2.1: There is compliance with all applicable local, national and ratified international laws and regulations.

Findings:

The company has a mechanism for evaluation of implementation and compliance to applicable legal re-quirements as per their standard operation procedure i.e. SOP-AGR-LGL-02 R.02 dated May 01, 2012. This SOP includes a mechanism for evaluation of compliance to regulations related to the company's plan-tation, legislation related to the environment, legislation relating to labour, and regulations related to health and safety. The SOP states that the identification and evaluation is to be carried out 2 (two) times a year and conducted by estate and mill staff, to be assisted by the environment, health and safety (EHS) estate and mill also legal officer from Head Office. The company also has a procedure for Identification of Law and Other Legal Requirements no. SOP-AGR-024-R00, dated 1 April 2013, which defines the procedure for identification of new and updated laws, and how to make updates to laws and regulations relating to the company.

All related laws and regulations are listed in the document 'Evaluation of Compliance to Legal Requirements dated July, 2013, which includes checking compliance to all legal requirements applicable with the compa-ny. Compliance checks are also carried at every estate under PT DIN and PT DWT once every 6 months. As seen from the records of legal compliance checks done for January - June 2013 at LK1, LK2 and LK3 estates under PT DIN, and ME3 estate under PT DWT there was found only one legal noncompliance at LK1 estate to the Regulation from the Director General of Communicable Disease Control and Environmen-tal sanitation of Settlements no. 32-I/PD.03.04.LP about pesticide store, due to lack of proper drainage and control sump, and exhaust vent at the pesticides store. There is evidence that all estates at PT DIN have taken action to rectify this nonconformity, i.e. photos of drainage and exhaust fan constructed at the estate pesticide stores. The mill has also conducted a legal compliance check dated 4 June 2013 with no legal non-compliances found.

Some evidence of compliance with relevant legal requirements as seen from the latest legal requirements register was sighted - covering for both mill & estates under PT Dharma Intisawit Nugraha dan PT Dewata Sawit Nusantara. For example : 1. The company has reported chemical use in the work place to the Head Of Labour with letter number

049/DWT-PH/VI/2013 on June 18, 2013 and has received by the Head of Labour evidence with stamp and signed on July 4, 2013.

2. The company was ensure their chemicals used are registered in the Chemical Book, Issued by Chemical Pestiside and Fertilizer Commision, Ministry of Agriculture 2012

3. The company has Committee of Health and Safety (P2K3) based on Decree Head of Labour Kutai Timur Regency Number 566/826/P2K3/Was about the Revision of Health and Safety Committee




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Other evidence, mill licenses were checked and found to be still valid, as follows: 1. License for temporary storage of hazardous wastes at Mill 3 of PT DSN from the Regent of East Kutai

dated 27 February 2013 and valid for 5 years. The hazardous wastes are permitted to be kept for 90 days and include used oil containers, used batteries, used filters, grease containers, oil contaminated rags, printer cartridges, chemical containers, used fertilizer bags and medical wastes.

2. License for the collection of hazardous wastes issued to the mill's selected contractor for waste collection, i.e. CV Sumber Agung with license for collection of used oil containers and dirty oil dated 21 February 2011, and license for collection of solid wastes such as used batteries, used filters, metal solid wastes and contaminated metals, medical wastes, oil wates and chemical, electrial wastes and so on. Both li-censes are valid for 5 years.

3. License for Land Application given to Mill 3 of PT Dharma Satya Nusantara at Muara Wahau, East Kutai province, as per letter no. 660.41/K.142/2013, dated 27 February 2013 and valid for 2 years.

4. Licenses for 4 sterilizers, 2 boilers, 2 turbines and 3 gensets all dated November 2011 which is the time of start of operation of the mill.

5. Licenses for 4 boilerman e.g. operators with license no. 1669-OPKS-PUBT-B- 1/XI/2012 and license no. 1847-OPK3-PUBT-B-II/XII/2012) , and has company has 2 certified electrictician in Genset room e.g op-erator with certificate number Kep.01/AK3-LIST/M/DJPPK/II/2011. It was sight all licenses still valid at the audit time.

There is also an MOU for Jengea Pet Bong Kuq Cooperative for 668 ha dated 3 December 2012, but the lo-cation permit and license for cooperative participants are still in progress and the land for this cooperative is not yet developed. As per the company's procedure, checks to changes to applicable legal requirements are done by the re-spective related departments, i.e. legal department, environment, health and safety department (EHS) and Human Resources Department for the laws and regulations related to each department once every 6 months. Updates to legal requirements are done through checking the mass media, the internet, workshops or notification from the government. The latest update to legal requirements was in year 2012, when a new Government Regulation no. 27 year 2012 regarding Environmental Permit was found through the internet and included in the company's list of applicable legal requirements

In the estates and pal oil mill, other evidence that the company complies with relevant legal requirments (de-cree letter from Ministry of Agriculture No. 367/Kpts/HK.350/2002 article 4 jo Ministry of Agriculture No.26/Permentan/OT.140/2/2007 article 9) is the organization has a Plantation Business Permit (Izin Usaha Perkebunan (IUP)). Details of the Plantation Business Permit (IUP) for the plantations and mill are as follows:

1. IUP for PT Dharma Intisawit Nugraha (PT DIN) is as per decree of Kutai Timur Regent No. 431/02.188.45/HK/IX/2007, dated on August 24, 2007 for total area of 10,000 ha at Muara Wahau Village, Muara Wahau Sub District, Kutai Timur District, East Kalimantan Province.

2. IUP PT Dewata Sawit Nusantara (PT DWT is as per decree of Kutai Timur Regent No. 500/206/Eko.1-X/2009, dated on October 23, 2009 for total area of 15,000 ha at Muara Wahau Sub District, Kutai Timur District, East Kalimantan Province.

3. IUP for PT Dharma Satya Nusantara (PT DSN) palm oil mill (POM 3) is as per decree of Kutai Timur Re-gent No. 188.4.45/057/Eko.1-V/2011, dated on May 10, 2011 with capacity of 60 ton FFB/hours.

There is a Regulation of the Minister of Agriculture. 26/Permentan/OT/140/2/2007 about Plantation Business

Licensing Guidelines, which states that companies with Business Permit (Izin Usaha Perusahaan - IUP) are required to develop community estates equivalent to 20% of the total area of the company's area. As the company has an IUP, the company is still in the process to comply with this rule before 2014 (in ac-cordance with a letter from the Regent no. 180/36/HK/V/2011, dated May 3, 2011 regarding Process of Development of Estate Partnership in Areas Surrounding the Company). Oil Palm Plantation Develop-ment MOUs between local community members surrounding PT DWT have been prepared and land de-velopment is already complete for the following cooperatives:

- Sawit Usaha Tani Sejahtera Cooperative, MOU dated March 31, 2008 - Sawit Wehea Tlan Sejahtera Cooperative, MOU for 400 ha dated 1 March 2008, and 550 ha dated 25

April 2012 - Seleq Sejahtera Bersama Cooperative, MOU for 350 ha dated 10 April 2010

Compliance status: Full Compliance




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Criterion 2.2: The right to use the land can be demonstrated, and is not legitimately contested by lo-cal communities with demonstrable rights.

Findings:

The organization has documents showing ownership or lease of the land in accordance with relevant laws, for PT Dharma Intisawit Nugraha (PT DIN) and PT Dewata Sawit Nusantara (PT DWT) plantations as well as for PT Dharma Satya Nusantara (PT DSN) palm oil mill 3.

PT Dharma Intisawit Nugraha plantation received a decree from the National Land Agency stating approval for issuance of the land use right title (HGU (Hak Guna Usaha)) for total area of 9,811.85 ha for the plantation as stated in letter no No. 66-HGU-BPN RI-2007 dated on December 19, 2007 (appropriate with map No. 013-16.09-2006) at Muara Wahau Village, Muara Wahau Sub District, Kutai Timur District, East Kalimantan Prov-ince valid for 30 years. Based on this letter, the organization received their HGU certificate No. 22/Muara Wahau year 2008 dated on January 15, 2008 for total area of 9,811.85 ha which is valid for 30 years (until De-cember 18, 2037). Former company’s land status was natural forest production. The company obtain first lo-cation permit for oil palm plantation in Muara Wahau, Benhes, Dabeq and Diak Lay Village, Muara Wahau Sub District, East Kutai District as per decree No.136/02.188.45/HK/IV/2004 dated on April 28, 2004 from East Ku-tai Regent for total area of 10,125 ha which was renewed as per decree No. 175/02.188.45/HK/V/2006 dated May 24, 2006 from East Kutai Regent for the same total area. The company obtained a permit from the Minis-try of Forestry, to change the land status from natural forest production status into plantation area through de-cree letter of the Ministry of Forestry No. 130/Menhut-II/2005 dated May 23, 2005 which stated that the 10,125 ha is allowed to be converted into oil palm plantation. PT Dewata Sawit Nusantara plantation has land use right (HGU (Hak Guna Usaha)) title No. 84-HGU-BPN RI-2008 dated on December 31, 2008 from National Land Agency for a total area of 13,629.50 ha at East Kutai District, East Kalimantan Province, in accordance with map No. 600/01/BPN-44/2008 and valid for 35 years. Information on the map states that PT DWT area was divided into 5 areas. The organization has HGU titles for each area, all five of which are dated January 27, 2009 and valid for 35 years (until December 30, 2043) for areas in Muara Wahau Sub District, Kutai Timur District, East Kalimantan Province. Details of the HGU titles are as follows : 1. Area A: HGU title no. 37/Benhes, Deabeq, Diak Lay for total area of 277.50 ha (appropriate with measure-

ment letter No. 01/Kutai Timur/2009 and map No. 600/01/BPN-44/2008) 2. Area B: HGU title no. 38/Benhes, Deabeq, Diak Lay for total area of 510.17 ha (appropriate with measure-

ment letter No. 02/Kutai Timur/2009 and map No. 600/01/BPN-44/2008) 3. Area C: HGU title no. 39/Benhes, Deabeq, Diak Lay for total area of 10,135.58 ha (appropriate with meas-

urement letter No. 03/Kutai Timur/2009 and map No. 600/01/BPN-44/2008) 4. Area D: HGU title no. 40/Benhes, Deabeq, Diak Lay for total area of 2,652.55 ha (appropriate with meas-

urement letter No. 04/Kutai Timur/2009 and map No. 600/01/BPN-44/2008) 5. Area E: HGU title no. 41/Benhes, Deabeq, Diak Lay for total area of 53.70 ha (appropriate with measure-

ment letter No. 05/Kutai Timur/2009 and map No. 600/01/BPN-44/2008)

The company obtained their first location permit for oil palm plantation in Muara Wahau Sub District, East Ku-tai District through decree No.04/TIB/BPN-16.3/1999 dated July 29, 1999 from Kutai Regent for total area 15,000 ha which was first renewed as per decree No. 309 year 2002 dated November 22, 2002 from East Ku-tai Regent, and renewed a second time with decree No. 123/02.188.45/HK/IV/2005 dated November 22, 2002 from East Kutai Regent for total area 15,000 ha, and renewed a third time as per decree No. 452/02.188.45/HK/XII/2006 dated December 27, 2006 from East Kutai Regent. The last renewal of the loca-tion permit is as per decree No. 229/02.188.45/HK/V/2007 dated on May 30, 2007 from East Kutai Regent for total area of 15,109 ha.

PT Dharma Satya Nusantara palm oil mill (POM 3) received a decree from the National Land Agency stating approval for issuance of the building use right (Hak Guna Bangunan (HGB)) no. 20/HGB/BPN-64/2011 dated on February 2, 2011 for total area of 14.7 ha (appropriate with map No. 32/PB-64/200/X/2010 dated on Octo-ber 11, 2010) at Muara Wahau Village, Muara Wahau Sub District, East Kutai District, East Kalimantan. Based on this decree letter, the company obtained their HGB certificate no. 04/Muara Wahau year 2011 for total area of 14.7 ha (appropriate with measure letter No. 01/Muara Wahau/2011) valid until February 23, 2031. The company obtained the location permit for palm oil mill (POM) in Muara Wahau Sub District, East Kutai District through decree No.525.26/K.621/HK/VI/2010 dated on June 22, 2010 from East Kutai Regent with total area 14.7 ha.

Some legal boundaries are clearly demarcated and visibly maintained on the estate as seen on the field for




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boundary stones numbered DIN-001, DIN-005, DIN-024, and DIN-048 in PT Dharma Intisawit Nusantara (PT DIN) and boundary stones numbered DWT-010, DWT-057 and DWT-028B in PT Dewata Sawit Nusantara (PT DWT). The company has placed all boundary stones at locations appropriate with map No. 600/01/BPN-44/2008 dated on January 4, 2008 (PT DWT) and No. 013-16.09-2006 (scale 1 : 25,000) (PT DIN). To ensure that every boundary stone is clearly demarcated and visibly maintained, the company has a boundary stone maintenance program where monitoring is implemented every three months. The company has evidence that there are proof of resolution or progress towards resolution by conflict reso-lution processes which is accepted by all affected parties from 3 (three) villages (Dabeq, Diak Lay, and Ben Heas). There is statement from PT Dharma Intisawit Nugraha management which stated that conflict resolu-tion with the three villages (Dabeq, Diak Lay, and Ben Heas) was resolved on February 8, 2011, with agreement by all parties. There are 8 points of claim by three villages, such as: 1. Customary land compensation for three communities 2. Return of smallholders certificate 3. Material compensation for making employee housing 4. Material compensation for making housing for assistants 5. CPO retribution of villagers 6. Letter of agreement “SPK” for company’s contribution to local communities regarding 2nd palm oil mill

construction 7. Palm oil mill 2 status was build in ancestral sites of Wehea people 8. Material compensation used for construction of mill 1 and mill 2 A number of identified land disputes have been resolved such as a land dispute between PT DIN with farmer group from Long bau village and land claimer in HGU Melenyu 1 estate PT Dewata Sawit. Some proof of resolution accepted by both parties was sighted, such as: There are minutes of meeting for handover land compensation payment such as:

1. To farmer group Long Leis Blom from Long Bau village on April 07, 2012 for land claim of 30 ha in-side compnay’s conservation area in HGU estate Long Kejiak I PT DIN. There was commitment made from both parties regarding how to manage together these conservation areas.

2. To 4 land claimers in Melenyu 1 estate in PT Dewata Sawit Nusantara for total area 22.96 ha are paid according to west kalimantan regulation i.e. Rp 750,000 per ha.

A number of land disputes are in progress towards resolution, with negotiations for land compensation still ongoing. The company has a progress plan to resolve the remaining land disputes, and this is has been communicated to the relevant parties. There is a statement from the head of the village of Muara Wahau village, Dabeq village, Daik Lay village , and Benheas Village on September 8, 2006 regarding their support of the concession area of PT DIN’s ar-ea of 9,981 Ha being located in their territory, as PT DIN’s concession area is not being used by the local community’s for any activities. There is agreement regarding the use of PT DIN’s concession area totalling 9,981 ha with farmer groups Mehling Long Leis Blom Village regarding amount of land compensation according to measurement in the field on March 13, 2013 involving a farmer leader and head of CSR program PT DIN. The statement of agreement was signed by the Head of Wahau village, Ben Heas village, Diak Lay village, Dabeq village, Nehes Liah Bing village, and Head of Wahau Subdistrict dated September 08, 2006. The mechanism of conflict resolution procedures/complaints/claim as well as communication and consulta-tion procedures 215B/SWA-CSR-WHU0VI02912 was agreed by the community, and a copy has been given to them. Appendix 1 of the procedure contains mechanism for conflict resolution procedures / complaints / demands concerning land claim, labor, job transactions and other interest issues. Stakeholder can submit complaints either by mail or walk in to the CSR office to explain about the issue raised. Subject matter, complaints or claims that require material evidence can be included when it is delivered to the company. Compliance status: Full Compliance

Criterion 2.3: Use of land for oil palm does not diminish the legal rights, or customary rights, of oth-er users, without their free, prior and informed consent.




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Findings: There are no identified customary rights in the HGU area of PT Dharma Intisawit Nugraha and PT Dewata Sawit Nusantara as explained in a letter of statement by Head of Village on June 28, 1998. It was confirmed by local communities surrounding the company’s area and in the Social Impact Assessment document made by the consultant, Daemeter. Compliance status: Full Compliance

Criterion 3.1: There is an implemented management plan that aims to achieve long-term economic and financial viability.

Findings:

The company has a management plan for a 3 years period i.e. projection for 2013 to 2016 with information on this document consisting of company activities such as profit and loss information from Total Revenue and To-tal Operating Cost, including information about gross operating cost, profit/loss before tax and profit and loss after tax. The company has a financial schedule for yearly budget. Information in the document consists of general routine operational activities such as taget of FFB yield /ha, plantation maintenance, harvesting, ferti-lizer, investment plans such as enrichment planting (planting of various plant species to enhance biodiversity), mill activities such as FFB processed, projected oil extraction rate (OER) and kernel extraction rate (KER), projected crude palm oil (CPO) and palm kernel (PK) production, CSR programmes and environmental moni-toring, HCV management plan and other activities to fulfil RSPO requirements. The company has also devel-oped a yearly plan as seen for year 2013, containing information on the budget for each activity (including ac-tivities for environmental management programmes and all CSR related expenses, legal compliance and RSPO P & C compliance) and revenue from company's production including all company's liabilities. The amount of profit estimated to be achieved each year was clearly calculated, and all information is clearly ex-plained in PT Dharma Intisawit Nusantara and PT Dewata Sawit Nusantara’s budget plan from 2013 to 2016.

In a cash flow projection document, there is also a plan for 3-year cash inflow from sales of CPO and palm kernel sales. The main points of cash outflow is the overall production cost of the estate and the mill include the cost of estate maintenance (susnainability cost), as well as the combination of costs associated with envi-ronmental and social monitoring activities.

From income analysis that has been carried out with consideration of production cost and cost from others ac-tivities, it was sight a positive trend and good profit increased gradually, it is projected the profit become dou-ble in year 2016 from year 2013 profit. There is no indication of a negative profit trend.

Safety and heath programs are described in detail and clear as well as for CSR programs. All costs associat-with environmental management activities and social community activities are already included in this docu-ment.

Budget and target achievement evaluations are carried out every year, and the evaluation of achievement for management plan year 2012 was sighted.

Due to all plantations still young and company still has new planting area, there is no replanting plan but com-pany has 5 year planting plan for new planting area in PT Dewata sawit Nusantara especially for area in Melenyu 4, as explained on report of New Planting Procedure for PT Dewata Sawit Nusantara. Compliance status: Full Compliance

Criterion 4.1: Operating procedures are appropriately documented and consistently implemented and monitored.

Findings: The company has List of Work Instructions or “instruksi kerja” for estate and mill activities. The work instruction covers all estate activities such as pre-development and planning, nursery practices, land clear-ing and preparation, establishment and maintenance of leguminous cover crops, oil palm planting density and pattern, and maintenance, harvesting, pest and disease management, replanting, and mulching. And work instructions for mill was covered all the activity in the mill such as receive the FFB, process, laoding ramp, grading, sterilizer, dispatch of CPO, etc. This are some examples of work instructions for estate and mill:




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Work isntruction or procedures that are available include the following: 1. IK-AGR-OLP-01-R01 Land Clearing 2. IK-AGR-OLP-02-R01 Nursery 3. IK-AGR-OLP-03-R01 Establishment and maintanance of leguminous cover crops 4. IK-AGR-OLP-04-R00 Planting 5. IK-AGR-OLP-05-R00 Propagation of Mucuna bracteata 6. IK-AGR-OLP-06-R00 Palm oil insertion 7. IK-AGR-OLP-10-R00 Land Application 8. IK-AGR-OLP-11-R00 Mulching of EFB 9. IK-AGR-OLP-13-R00 Early detection of pests and desease (EWS) 10. IK-AGR-OLP-14-R00 Pest and desease control 11. IK-AGR-OLP-23-R02 Harvesting 12. IK-AGR-OLP-24-R00 Harvest and transportation, etc.

Work instructions or procedures that are available for mill, include: 1. SOP-AGR-028-R00 Dispatch CPO and Kernel 2. IK-AGR-PRO-01/R00 Receipt of FFB 3. IK-AGR-LAB-13/R00 Controling of Process 4. SOP-AGR-POM-02-R00 Despatch CPO and Kernel 5. IK-AGR-DSP-01/R00 Filling CPO to Storage Tank 6. IK-AGR-LAB-12/R00 Kernel Despatch 7. FM-PRO-08-R00 Daily Production Report, etc

The company has records of regular checking and monitoring of operations done regularly, i.e. once every 4 months. Internal audits are done by a team specifically hired to conduct internal audits and check for com-pliance against the company's own SOPs, and there are records that the auditors have been trained on au-diting techniques (training attendance lists dated 8 November 2012 and 17 January 2013), audit reporting (8 November 2012) as well as training on RSPO P&C and ISO9001. The company has records of non-conformity reports issued for each estate and the mill during the most recent audits done in April and Janu-ary 2013. The company’s performance management review will be conducted once a year. The company has records of management review conducted on April 19, 2013, which was attended by 76 persons. The management review included discussion about: - The effectiveness of procedures and work instructions to ensure that they are still applicable or need

revision; - Internal audit to ensure the systems are implemented well - Follow up on domestic waste management, hazardous waste management, clean water, erosion at the

riparian buffer zones, greenhouse gas (GHG) mitigation, and availability of PPE for all warkers. The company conducts internal audits and monitoring for all operational activities once every 3 months in accordance with SOP-AGR-STD-05R.02 about the meeting of Management Review, on page 4, point 3 which states that the intermediate management review shall be conducted once every 3 months. Records of operational results are well maintained in each estate and mill on monthly reports was include all activity in the mill and estate, example is activity for: 1. Record of Early Warning System (EWS) training for IPM conducted on March 17, 2013 in Division 11

which was attended by 12 persons in charge for IPM with evidence in the form of attendance lists, train-ing materials and photographs of the training.

2. Record of CPD45 fertilizer applications on March 2013 in Division 13 Block F33 B Melenyu 3 Estate, with area 7 Ha with fertilizer total was application is 10,134 kg per block, when the dosage per tree is 2.75 kg/tree, and was applied on February 2013. When referring to the fertilizer recommendation in 2013 issued by Research Department for Division 13 in pages 2 of 5 was complie with the dosage on recommendation.

3. Record of harvesting and FFB despatch number 025786. FM-PRO-01-R00 on January 31, 2013 from Melenyu 2 Estate Block F35, 54, and 55 with total FFB 1,241 FFB, with total nett weight is 8,050 kg.

4. FFB despatch on August 21, 2013 from Melenyu 1 estate with transport unit number KT 8268 RD from Division 5 Block G79 as much 80 FFB, Block G78 is 515 FFB with brutto weights 4050 kg, and after grading in mill, based on record of receipts number FR-PRO-01-R01 total nett weights is 4.540 kg.

5. Records of hazardous wastes produced are recorded in hazardous waste inventory forms in accord-ance with SOP-AGR-035-R00 regarding waste management.




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6. Detailed pest detection records and reports are maintained at both PT DIN and PT DWT in accordance with the company's work instruction number IK-AGR-OLP-14-R00 dated 3 May 2010


Criterion 4.2: Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield.

Findings: Leaf analysis for both PT DIN and PT DWT is done annually. For example, the last leaf analysis done for PT Dewata Sawit Nusantara by PT Nusa Pusaka Kencana Analytical & QC Laboratory with reference number of analysis is 049/RD/EXT/XXIL/APR/2012, and the leaf analysis was conduct on March 10, 2012 for Melenyu 1, Melenyu 2 and Melenyu 3 estate. Soil analysis is conducted once every 6 years. Results of the leaf analysis are used in the development of the Oil Palm Fertilizer Recommendations for PT DIN and PT DWT. Records of actual fertilizer recommendations for all estates show that fertilizer is applied according to schedule with no delay. The company also carries out land application in accordance with their license for land application no. 660.41/K.141/2013 dated 27 February 2013 and valid for 2 years. According to the li-cense, blocks permitted for land application are blocks H40, H42-49, and I43-I46 located in LK2 and LK3 estates with total area of 360 ha. Amount applied per ha is in accordance with the company's work instruc-tion IK-AGR-OLP-10-R00 for land application, which state maximum of 250 m3/ha to be applied per rotation. . The company has records of efforts taken to maintain and and increase soil fertility, for example : 1. According to records of Borate application on February 2013, Block H89 B Division 4, Melenyu 1 Estate,

for total area 5 Ha and total trees at the block is 630 trees, total amount of borate applied was 18.90 kg per block, with recommended dosage per tree of 0.03 kg. The application and dosage was in accord-ance with the fertilizer recommendation.

2. According to records of Rock Phospate (RP) application on March 2013 in Block D65 for area 45 Ha, in Division 9, total RP applied was 1,457.75 kg per block, with dosage of 0.25 kg/tree. Based on record of daily report working progress on March 22, 2013, the application was in accordance with the fertilizer recommendation.

3. The company has records of cover crops plantings on Melenyu 3 and Meleyu 4 estate. Based on field observation, this is estate consists of immature plantings, so the company has planted “Mucuna bracte-ata” as cover crops.

4. Based on field observations, the company has applied EFB at Melenyu 1 estate, in accordance with fer-tilizer recommendation and the company’s work instruction IK-AGR-OLP-11-R00 which states that the EFB application should be in one layer, and based on observation, the company applies EFB in one layer in the field. For ME 3 estate, there is a schedule for recommended amount to be applied to each block in year 2013, however EFB application is not done exactly according to the program. For exam-ple, program stated 8 ha at block F37B, and 8ha at block D18 of the estate is to be applied with EFB but this was not due to poor road conditions, so EFB application was done at other blocks with was sched-uled for EFB application at a later date, e.g. 10 ha at block F37A was applied in January although pro-gram was for November 2013. This was raised as an observation. The mill maintains monthly records of amount of EFB produced and used for application to the field, e.g. for January 2013 total applied was 5,370,519 tonnes, in February 2013 total EFB applied was 5,418,680 tonnes and March 2013 total ap-plied was 4,526,085 tonnes.

Based on all record was verify, the company has maintained records about soil fertility through fertilizer ap-plication, cover crops cultivation, EFB application, and the company has good commitment for maintain their soil fertility based on palm oil best practices from Directorate General of Estate, Ministry of Agriculture of In-donesian and based on work instructions. Compliance status: Full Compliance

Criterion 4.3: Practices minimise and control erosion and degradation of soils.

Findings: The company has soil maps for both PT DIN and PT DWT, showing soils types are generally of types




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Kanhapludults, Kandiudults and Udifluvents, which are primarily alluvial soils with good drainage. There are no widespread fragile or marginal soils within both companies land area. The company has a topography maps for both PT DIN and PT DWT, which shows a generally flat area of 0-15% at both plantations and only very small areas of slope, usually adjacent to rivers. There is a HCV area at Melenyu 4 estate where with slope of 8-26%.The company has a work instruction for planting on sloped areas defined in their SOP for land clearing, IK-AGR-OLP-01-R01 which includes instructions for terracing, horseshoe method, and conservation through planting of vertiver grass. PT DIN implements best practices to reduce erosion at sloped areas and has a plan for planting of vertiver grass for year 2013. For PT DWT, the company carries out monitoring of erosion at high erosion points, i.e. division 4, block I93 of Melenyu 1 estate, division 7, block F70 and division 8, block E68 of Melenyu 2 estate and division 4, blocks G31 and F33/34 and division 15, blocks F27/28 of Melenyu 3 estate. The area with highest erosion is block I93 of ME1 estate with 10cm recorded on 2 August 2013. Two erosion points at blocks F28 (at a road) and G31 (adjacent to a river) of ME3 estate were visited and found that efforts has been taken to reduce the erosion at this areas such as bunding with sacks and planting of vertiver grass and other trees. Sighted sample road maintenance programs for LK3 estate under PT DIN, as well as Melenyu 1 and Melenyu 3 estates for year 2013 including details of area and blocks where road maintenance activities are to be conducted and progress. For LK3 estate, total road maintenance is planned for 33,052m and actual amount done up until time of audit is 15,168m. The estate also carried out manual maintenance of road drains with is documented in a program as well. For ME1 estate, total road maintenance is planned for 60,255m and up until time of audit, 30,181 metres was completed while for ME3 estate, total road mainte-nance planned is 75,700m and actual amount done is 50,903m. For Melenyu 4 estate, as the estate is still having new plantings in year 2013, the company is in progress to construct the roads and up until July 2013, total of 14,311m of transport roads and 38,377m of collection roads have been constructed. It was observed that some non-planted areas of Melenyu 4 estates have poor road conditions There are no peat soils, fragile or marginal soils identified at both PT DIN and PT DWT aside from the small areas of high erosion as described above. Compliance status: Full Compliance

Criterion 4.4: Practices maintain the quality and availability of surface and ground water.

Findings: The company has identified all streams that flow inside of estate area and created a riparian buffer zone management programme. There is only one river in the area of PT Dewata Sawit Nusantara plantation, i.e. Wahau River, width of rivers ranges from ± 50 meters. Besides the river, the company also protects the nat-ural streams in the area. The company has a plan for protection of river riparian buffer zones and natural streams through felling of oil palm trees adjacent to these natural streams and replanting the buffer zone ar-eas with hardwood trees and vertiver grass such as at Wahau River riparian buffer zone, in order increase the retention time of canal water potentially contaminated with chemicals or surface run-off into main streams. The company has implemented their plan, through planting vertiver grass at sloped areas, and signboards with information regarding riparian and others natural streams in the area are available. The company also made an SOP for protection of riparian buffer zones of watercourses and wetlands, including maintaining and restoring appropriate riparian buffer zones, prohibition of agrochemical application activities nearby rivers or watercourses IK-AGR-STD-02-R01. The company has work program for riparian buffer zone maintainance and water dam for total area of 16.99ha at Melenyu 1 estate, 185ha for Melenyu 2 estate and 42.7 Ha at Melenyu 3 Estate. Activities under-taken are manual weeding, no chemical application for palm oil trees in the area and vertiver grass planting. For Melenyu 4 Estate, during the audit time, the estate consists of new and immature plantings, and the company implemented water management by not carrying out plantings at riparian areas. The company has a work instruction for work activity in riparian and buffer zone area IK-AGR-STD-02-R01, which states that the riparian area for natural streams is ± 50 meter or between 7 trees of palm oil. The company will not apply agrochemicals at such areas and cannot be sprayed as per the work instruction. The company has monitoring the record of water usage from January until December 2013, the record water




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usage ranged between 1.08 m3/ton FFB to1.28 m3/ton FFB each month. The company has conducted the waste water analysis, some evidence was sight on site e.g. certificate test result number 06372/BCEKAG on March 30, 2013, certificate test result number 06351/BCEKAG on May 12, 2013 etc. Compliance status: Full Compliance

Criterion 4.5: Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques.

Findings: The company has IK-AGR-OLP-14R.00 dated on 3 May 2010 for Pest and Disease Management. The com-pany maintains records of conducting pest and disease detections once a month at each estate, which is done for nettle caterpillars, bagworms, rats and spike moths (tiratabha sp.). The company also implements biological pest management methods such as planting beneficial plants such as turnera sp. that attract nat-ural predators of leaf eating insects. Plantings of turnera species is planted along most of the estate main roads. There is a pest detection team at every estate division. For PT DIN, sample monthly pest detection reports for Long Kejiak 1 estate in year 2013 were sighted and it was observed form the reports that pest attack rates are low. According to the management, chemicals management of pests is not required when attack rates are low. For management of nettle caterpillars or bagworms, biological methods such as hand picking and NPV virus spraying is done. Last treatment with NPV virus was in January and February 2012. Detec-tion results in January 2012 showed caterpillar attacks were moderate (up to 13.94 caterpillars per stem in one block), which justifies implementation of NPV virus spraying. To manage rat pests, the company has re-cently installed a barn owl box on 4 January 2013 as the biological management method, however so far no owls have resided in the box due to low number of rates. 'Tiratabha' attacks also managed by regular prun-ing of palms. There are records of pest detection and management trainings performed in all estates, i.e. at Long Kejiak 1 on 18 January 2013 for 24 people, at Long Kejiak 2 on 29 September 2012 for 47 people and at Long Kejiak 3 on 26 January 2013 for 24 people. Training materials were also sighted. For PT DWT, it was sighted from detection records that there were medium and high rate of bagworm at-tacks at some estates during early 2013, e.g. in January 2013, there were medium to high attacks rates of bagworms at block F29, F30 and G30 of Melenyu 3 estate. The company controlled this through hand pick-ing activities, with records of amounts picked, and sighted in the following month's detection records that the rate of attacks has lowered significantly. Detection of rats and 'tiratabha' are also done once a month, and rat bait is only applied where there are high rates of attacked above 5%, i.e. as sighted from monthly rat dis-tribution maps that there was high rates of rat attacks at blocks J99 and J100 of Melenyu 1 estate and rec-ords of the rat bait Klerat used was 2.5 kg at J99 and 4kg at block J100. No Klerat was used during other months. All estates under PT DIN have a documented 'Chemical Usage Trends' from year 2010 to 2013 while es-tates under PT DWT have documented trends on 'Comparison of Agrochemical Usage and Toxicity' from year 2011 to 2013. The documents include graphical comparisons of chemical usage trends, which general-ly show a reduction in usage of chemicals over the 3 or 4 year period. For example, data for Melenyu 1 es-tate shows usage of the chemical Agristik has reduced from 0.216 litres/ tonne FFB in year 2011 to 0.015 li-tres/ tonne FFB. The chemicals included in the toxicity analysis include Agristik, Ally, Garlon, Gramoxone, Round up, Starane, Termiban-Lentrex, and Klerat. Compliance status: Full Compliance

Criterion 4.6: Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorised as World Health Organisa-tion Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.




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Findings: All estates under PT DIN have a documented 'Chemical Usage Trends' from year 2010 to 2013 while es-tates under PT DWT have documented trends on 'Comparison of Agrochemical Usage and Toxicity' from year 2011 to 2013 which lists all chemicals used. These all include approved and registered agrochemicals such as Agristik, Ally 20 WDG, Garlon, Gramoxone, Round Up, Starane, Termiban, Lentrex, and Klerat. All chemical used are reported regularly to the Manpower and Transmigration Officer (Dinas tenaga Kerja Dan Transmigrasi ) Kutai Timur district, with last report done in July 2013. All chemicals used are registered in the List Of Chemicals, Character and Quantity of Hazardous Chemical as defined in the List of Agriculture and Forestry Pesticides year 2012, published by Indonesia Ministry of Agriculture. All chemicals used was last reported to Manpower and Transmigration Officer Kutai Timur, in July 2013, for example usage of Round up (isopropylamina glyphosate) usage for LK1 estate is 3.814 litres, LK2 estate is 4.525 litres, LK3 estate is 6.473 litres and amount for PT DSN mill is14.812 litres (used to clear wild grass-es within the mill compound). Usage of agrochemicals is appropriate for the target species, given at correct dosage and applied by trained personnel in accordance with the product label and storage instructions. For example on 11th July 2013, circle path spraying at Block E-15 was done with Round up for area of 38 Ha, and total amount applied was11.4 Litres, which is within the recommended dosage of 0.3 litres/ha. For PT DWT the company uses chemicals registered and allowed by the Government as per the book of Chemical for Agriculture in 2012 issued by the Directorate of Fertilizer and Chemical, Ministry of Agriculture, and also the company has reported their chemical usage to the Head of Labour and Transmigration of Kutai Timur Regency through the letter number 049/DWT-PH/VI/2013 on June 18, 2013 and there is evidence of receipt in the form of stamp from the institution. PT DWT also maintains records of chemical use, as sighted from sample records of work program for circle and path spraying activities conducted on June 19.2013 for Division 13 Block F35 Melenyu 3 Estate for area of 51 Ha, and amount of chemicals applied was 9 litres of Garlon and 1 litre of Agristick. Based on records of daily work progress for Block F35, dosage of chemicals applied was 0.35 litres/Ha for Garlon and 0.04 li-tres/ha for Agristick, and the application dosage and actual amount applied complies with the company’s work program. In addition, records of circle and path spraying on August 27, 2013 conducted at Block G46 Division 12 Melenyu 2 Estate for area of 21 Ha stated Round up + Agristick + Starene was used with dos-age of 0.42 ml + 0.04 gr + 0.05 ml per knapsack. Referring to daily work progress form no. FM-OLP-03-R00 on August 27, 2013 in Block G46 the amount applied is in accordance with the company’s work program and the chemical dosage is in accordance with supplier recommendations when traced through goods issu-ing notes from warehouse on June 27, 2013. For chemical containers, the company manages empty chemical containers as hazardous wastes as per SOP-AGR-SHE-02-R01 about the waste management valid from June 15, 2012. The company has a li-censed contractor, CV Sumber Agung who collects all hazardous wastes on a regular basis ( at least once every 90 days). Records of recent collections of hazardous wastes were sighted from hazardous manifest number 0001357 on May 10, 2013 with unit transporter number KT 8622 BF and manifest number 0001280 on March 28, 2013 with unit transporter number KT 8991 CA to the CV Sumber Agung as licensed collector. The wastes collected including empty chemical containers. The company does not use chemicals categorised as World Health Organisation Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions, except for the rat bait Klerat, which contains the active ingredient brodifacoum. Usage of this chemical is minimal and only when rates of rat attacks are high as determined from pest detection records, as explained under CR4.5 above. PT DIN and PT DWT have a plan for reduction of usage of paraquat. Based on an Internal Correspondence memo dated 30 November 2012 to all estate heads located at East Kalimantan region, there is no budget for purchase of paraquat in year 2013 and the estates are only allowed to finish stock from year 2012. For PT DIN, it was sighted from chemicals usage records for year 2010-2013 that there is no longer any us-age of Gramoxone (containing paraquat) at LK1 and LK2 estates in year 2013, but up to 402 litres of Gra-moxone had been used at LK3 estate in year 2013 up until July. For PT DWT, as sighted from Melenyu 3 estate's monthly chemical usage records, it was seen that the last usage of Gramoxone was 164 litres in year 2012 and there is an instruction letter dated 1 November 2012 from the ME3 estate manager instruct-ing reduction of usage of chemicals for weeding and to substitute with manual methods. As seen from chemical stock usage records for ME1 estate and ME2 estate from January to June 2013, there was gradu-reduction in stock of gramoxone used and last stock used was 43 litres in ME1 estate and 155.25 litres in




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ME2 estate, and stock of gramoxone was zero in July 2013 for both estates. Medical check up for spraying regularly conducted (yearly). Any employee found to have evidence of low blood cholinesterase levels will be transfered to non chemical related work. Records of most recent medical check up done in January 2013 was sighted as below: 1. Medical checks at Melenyu 1 Estate was conducted for 66 sprayers and 56 manurers, and based on the

cholinesterase test result, there is no worker with health abnormalities 2. Medical checks at Melenyu 3 Estate was conducted for 133 sprayers and 120 manurers, and based on

the cholinesterase test result, indicated 3 workers with low blood cholinesterase levels. The company followed up by transferring the affected workers from performing chemical work to manual work as seen from worker transfer orders dated from February 8 until 22, 2013. It was verified from attendance lists that the 3 workers above were no longer carrying out chemical related work.

3. Medical checks at Melenyu 3 Estate was conducted for 150 sprayers and 120 manurers, and based on the cholinesterase test result, indicated 1 worker with low blood cholinesterase levels. The company fol-lowed up by transferring the affected worker from performing chemical work to manual work as seen from worker transfer order dated February 7, 2013 about the work relocation into manual work.

The company also conducts pregnancy checks for all female chemical workers once a month, and based on test results, there are records of 2 female sprayers from Division 10 of Melenyu 2 estate found to be preg-nant and transferred to manual work, based on work transfer letters dated 7 February 2013 and 26 January 2016. Compliance status: Full Compliance

Criterion 4.7: An occupational health and safety plan is documented, effectively communicated and implemented.

Findings: The companies (PT DSN Mill 3, PT Dewata Sawit and PT DIN) have a Quality, Environment, Occupational Health and Safety Poliy is documented as defined in Quality Manual dated 1 June 2013. Both mill and estates management has assigned a PIC for responsible person for Health and Safety pro-gramme in plantation and a PIC for responsible person for Health and Safety programme in Palm oil Mill. based on decree of Head of Labour and Transmigration Kutai Timur Regency number 566/826/P2K3/Was about the revision of safety and health committee (P2K3) in PT Dewata Sawit Nusantara, this decree issued on June 27, 2013 and still valid if person in the organization structure is not replaced. The safety and health committee (P2K3) conducts the meeting periodically every months based on safety and health procedure SOP-AGR-037-R00 on pages 4 point 2. The evidence that P2K3 meetings are conducted periodically, for example is: 1. Records of minutes of OSH meeting conducted on January 11, 2013 number 001/DWT-P2K3/I/2013.

The meeting included discussion on the training for emergency response, hazardous waste monitoring and reporting, plan for water supply in housing area. The meeting was attended by 19 persons with evi-dence in the form of attendance list.

2. Record minutes of OSH meeting conducted on February 14, 2013 number 002/DWT-P2K3/II/2013. The meeting included discussion on work accidents in every estate, revision for risk identification, domestic waste management, first aid box supply and standard for fire extinguisher in the housing. The meeting was attended by 17 people as seen from the attendance list.

3. Record minutes of meeting conducted on March 26, 2013 number 003/DWT-P2K3/III/2013. The meet-ing included discussions about reporting of hazardous wastes, work accidents in all estates, medical checkup for chemical workers, medical checkup for pregnant and breasfeeding workers, and reported grievences about the housing condition. The meeting was attended by 15 persons as seen from the at-tendance list.

The safety and health committee (P2K3) has conducted the reporting result of P2K3 meeting periodically every 3 months to the Head of Labour and Transmigration of Kutai Timur Regency, example is: 1. Evidence of P2K3 report number 002/DWT-PH/I/2013 dated January 10, 2013 (for period of October –

December 2012) and has received by the institution 2. Evidence of P2K3 report number 028/DWT-PH/IV/2013 dated April 12, 2013 (for period of January –

March 2013) and has received by the institution 3. Evidence of P2K3 report number 054/DWT-PH/VII/2013 dated July 1st, 2013 (for period of April – June

2013 ) and has received by the institution




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The company has insured all workers with Jamsostek (Indonesian Social Security), example: evidence proof of payment number S0113080933 to Jamsostek on August 16, 2013 for amount of IDR 45,654,887.00 through the bank transfer for 390 workers in Melenyu 3 estate. The social security includes work accident insurance, retirement insurance, life insurance, and health insurance for July 2013. The next proof of pay-ment number S0113050806 was made on May 16, 2013 for amount of IDR 43,396,824.00 through bank transfer for 371 workers in Melenyu 1 estate. The social security included work accident insurance, retire-ment insurance, life insurance, and health insurance for April 2013. Accident and emergency preparedness procedures are available and defined in SOP-AGR-SEC-02-R00. Maps of OHS and first aid equipment are available and implemented. All foreman are equipped with First Aid Kits each and trained in fist aid techniques. Any work accidents are recorded and regularly reviewed, and reported to government side as Manpower and Transmigration Officer Kutai Timur, with last report on accidents dated 04th july 2013. PT DWT as well as PT DIN has Quality Guidelines PDM-AGR-R00 valid from January 2013. In page 10, point 3 of the guidelines, it is explained steps to ensure a work environment that is safe and healthy and the content includes information about: 1. To conduct identification of hazards and risks and controls 2. Management of chemical usage in the work place 3. To carry out planning, action and monitoring and also periodic evaluation of management of environ-

ment, health and safety aspects include medical checkups for workers working in high risk areas, train-ing on environmental and health, training for first aid, emergency response and PPE usage.

4. Responsibility for PPE for all workers 5. Social security and insurance The company has SOP-AGR-037-R00 valid from March 1st, 2013, the content explained about the risk management through the following: 1. Elimination of hazards or environmental pollution 2. Substitution of the potential cause of accidents or environmental pollution 3. Engineering controls to isolate workers from potential hazards 4. Administration management to change worker’s work habits through implementation of procedures to

avoid accidents 5. Usage of PPE The company also has conducted the training for safety and health for all workers through the signboard in-formation in the Division Office, housing, evacuation route, emergency response and emergency call re-spon. And the company has the procedure SOP-AGR-SHE-03-R00 about Occupational Health and Safety. The policy and SOP was communicated to all workers every morning through “morning talk” and was posted on bulletin board (“papan informasi”) and can be accessed by anyone. For regular examination in high risk workers condition, the company has conduct on January 2013 for all es-tate Melenyu 1, Melenyu 2 and Melenyu 3 estate. Based on the blood cholinestrase test results, there were 4 workers from Melenyu 2 and Melenyu 3 estate found with abnormal test results. The company followed up on this by transferring the 4 workers from chemical workers into manual workers as seen from letters to the workers regarding their transfer dated February 7, 2013. The company also regularly conducts pregnant and breastfeeding tests for women chemical workers, and based on test results, there are 2 workers found to be pregnant from Division 10, Melenyu 2 estate, and the company has changed their work to manual work through the letter number 0035/OS-BP/II/2013 and 021/OS-BP/I/2013 on February 26 and 27, 2013. The company has conducted first aid training; fire extinguisher training and emergency response training for all workers, with evidence as follows for PT Dewata Sawit below, such as: 1. Melenyu 2 estate, record of first aid training in Division 7 done on February 16, 2013 at 7.00 – 10.00

PM, records of training include attendance list, training materials and photograph, the training was at-tended by 43 workers.

2. Melenyu 1 estate, record of first aid training in Division 6 on February 15, 2013 at 7.00 – 10.00 PM, rec-ords of training include attendance list, training material, and photograph, the training was attended by 39 workers.

3. Melenyu 3 estate, record of first aid training in Division 15 on February 17, 2013 at 7.00 – 10.00 PM, record of training include attendance list, training material, and photograph, the training was attended by




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57 workers. 4. Record of training for person in charge of fire extinguishers on August 12, 2013 in emplacement

Melenyu 1 estate, and was attended 59 person from Melenyu 1, Melenyu 2 and Melenyu 3, record in-clude the attendance list, training material and photograph.

5. Emergency response training for Melenyu 1 estate conducted on February 15, 2013 attended 69 person evidence by attedance list, training material and photograph, and for Melenyu 2 and Melenyu 3 estate, the emergency response training conducted on February 18, 2013 attended 119 person evidence by at-tedance list, training material and photograph.

Similar documents were sighted for estates at PT DIN since PT DSN group has similar program for all es-tates The company has emergency response procedure, this procedure is a part of SOP-AGR-037-R00 about safety and health procedure valid from March 1st, 2013 on pages 16 has flow chart of emergency response, and also emergency response identification through the coordination and monitoring. And the company has emergency response team in every estate, when the team should consist of emergency monitoring, chief of emergency response, reahbilitation team, communication team, security and rescue team. Based on field observation in G46 Division 12 in sparing activities, Block F45 Division 2 in harvesting activi-ties, Melenyu 2 estate, Block E25 Division 15 in spraying activities, Block 27 and 28 Division 15 in harvest-ing activities, Melenyu 3 estate, all of the foreman has brought first aid box, and they are has first aid training from the company doctor. As for accident records, the company maintains the record very well, and which is monitored periodically through the manajement review and P2K3 meeting every month and was reported to the Head of Labour and Transmigration every 3 months. Sample accident invetigation reports sighted include information on the accident chronology, cause and effect analysis, and corrective action. Compliance status: Full Compliance

Criterion 4.8: All staff, workers, smallholders and contractors are appropriately trained.

Findings: Matrix of training year of 2013 is available, as training program for human resources year 2013 including Training which is related to Chemical Handling Training provided to all employees as well, example middleman (mandor-1st ) Supervisory Course for Man-dor-1 dated on 17 January 2013, plantation pest and deases detection, basic Safety (April 2013) and Fire Fighting Training (June 2013). The evidence of trainings was sighted such as training attendance lists, train-ing material and photographs. Th company also uses trained contractor for Fresh Fruit Bunch transportation as defined in the contracts be-tween contractors and the company, e.g. SPK No. 003/DIN/LK-1/2013. Compliance status: Full Compliance

Criterion 5.1: Aspects of plantation and mill management, including replanting, that have environmen-tal impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

Findings: There is a documented Environmental Impact Assessment or AMDAL document for both PT DIN and PT DWT, including the Environmental Management and Monitoring Plan (RKL/RPL document). The AMDAL for PT DIN is document no. 587/Menhutbun-11/99 dated December 2000 for an area of 10,000 ha and mill capacity of 60 tons / hour which has been approved by the Ministry of Forestry , Jakarta ( as per let-ter no. 136/Menhut - II/2000 ) on December 22, 2000 . PT DIN's AMDAL document is no longer applicable for Mill 3 because the mill's management structure was changed and the mill now has its own UPL/UKL document. The AMDAL document for PT DWT is dated 24 April 2009 for a total area of 15,109 ha and plant capacity 60 tonnes FFB / hour has been approved by the Regent of East Kutai in letter no.




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462/660.1/2.1/LH/IV/2009. However, at time of audit, the mill for PT DWT was not yet constructed so all from the company is sent to Mill 3 within PT DIN's area. The mill for PT DWT is planned to be completed by end of year 2014, after which all crop from PT DWT will be sent to that mill. The mill will also develop it's own UPL/UKL document. For this reason, PT DWT's mill has not done any report of progress to the imple-mentation of the RPL/RKL document in construction phase based on PT DWT's AMDAL document. The AMDAL for both companies include the identification of the physical aspects of the environment such as chemical and biological aspects, socio- economic background and culture, environment and society , and the identification of significant impacts include decreased river water quality of Sg. Wahau estate, disruption of protected flora and fauna , potential for fires , and civil and social unrest . The UPL / UKL document for Mill 3 is dated 6 August 2010 for a plant capacity of 60 tons / hour and ap-proved by the East Kutai Regency Head as per letter no. 660/649/3-BLH/VIII/2010. The company does their report on implementation of their RKL and RPL once every 6 months in accordance with legal requirements. The most recent one conducted at time of audit was for Semester 1 (January to June) of year 2013. As sighted from latest report for PT DIN and PT DWT, all parameters required to be monitored as per their RPL/RPL document have been included and there is no exceeded of any parameters required to be analyzed, except for river water quality, which is above the legal limit of 3ppm for both com-panies. However, the river water quality tested upstream is also already above the legal limit, with little change in the downstream sample analyzed, so it cannot be said that the river pollution resulted from the companies. From the mill's implementation report for Semester 1 year 2013, it can be see that analysis of POME dis-charged for land application is done once a month, and river water quality analysis is done once every 6 months by accredited lab Sucofindo, in accordance with the mill's license for land application. Analysis re-sults show no exceedance of legal requirements. Other parameters monitored include ambient air and gen-set emissions (test results dated 28 March 2013) and boiler emissions (test results dated 10 May 2013), vi-bration and noise (test results dated 31 May 2013). Test results show no exceedance of legal requirements for all parameters tested except for noise at the mill, which is managed using hearing protection PPE. There is no revision to the environmental management document due to no change to the companies oper-ating areas or activities. Compliance status: Full Compliance

Criterion 5.2: The status of rare, threatened or endangered species (ERTs) and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill man-agement, shall be identified and their conservation taken into account in management plans and op-erations.

Findings:

PT Dharma Intisawit Nusantara (Dharma Satya Group) has conducted identification of existing flora and fauna in their plantation area, there is a list of protected and non protected flora and fauna according to Indonesia Government regulation PP No. 7 year 1999 and identification of protected, rare and endangered species refer to CITES categorized. According to the list some prptected fauna still found especially in Melenyu 4 estate i.e. Tragulus spp (Kancil); Manis javanica (Trenggiling), Phyton molurus (sanca), Buceros rhinocerous (Rangkong Badak), and some Orchid sp and Shores species, etc.

The company also has conducted an assessment and identification of potential and existing HCV area within their plantation area. An identification of HCV has been carried out by a consultant, Daemeter Consulting in year 2012. The results of these assessments are documented in PT DIN’s HCV assessment report and PT DWT’s HCV assessment report.

Based on the HCV assessment report it was stated that 3 types of HCVs were identified in PT DIN, i.e. HCV 1 (forest areas containing globally, regionally or nationally significant concentrations of biodiversity values), HCV 3 (forest areas that are in or contain rare, threatened or endangered ecosystems), and HCV 4 (forest areas that provide basic services of nature in critical situations). Identified HCV 1 areas include HCV 1.2 and 1.3 ar-eas due there are areas which are supporting function of biodiversity to conservation area and identification of many wildlife species of protected and endangered status as explained above spread throughout conservation area No.I, III, IV and V. Total HCV area in PT DIN is 646 Ha such as block of conservation No.I, III, IV, and V (HCV 1.2, HCV 1.3 and HCV 3) is 646 ha (consist of block of conservation No. I = 71 ha, No. III = 228 ha, No.




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IV = 133 ha, No. V = 177 ha), and water flow atau river (Kenden Besar river, Blew river and Sung river) inside areas (HCV 4.1). On it is own initiative, the organization add to the conservation area is amount 37 ha (block of conservation No.II) which is located near block of conservation No.IV. Whereas in PT DWT i.e. HCV 1 (for-est areas containing globally, regionally or nationally significant concentrations of biodiversity values), HCV 3 (forest areas that are in or contain rare, threatened or endangered ecosystems), and HCV 4 (forest areas that provide basic services of nature in critical situations). Identified HCV 1 areas include HCV 1.1, HCV 1.2 and 1.3 areas due there are areas which has supporting function of biodiversity to conservation area and to identi-fication of many wildlife species of protected and endangered status as explained above, spread throughout block of conservation No. IX - XII. Whereas, identified HCV 4 areas include HCV 4.1, HCV 4.2 and HCV 4.3 due there are areas which has supporting function of water catchments (HCV 4.1), erosion control (HCV 4.2) and barrier to destructive fire (HCV 4.3). Total HCV area in PT DWT is 1,722 Ha such as block of conserva-tion XII (HCV 1.2, HCV 1.3 and HCV 3) is 129 Ha, block of conservation IX (HCV 1.2, HCV 1.3 and HCV 3) is 128 Ha, block of conservation X (HCV 1.2, HCV 1.3 and HCV 3) is 1,197 Ha, block of conservation XI (HCV 1.2, HCV 1.3 and HCV 3) is 268 Ha and water flow or river inside areas (HCV 4.1) or Muara Wahau River (HCV 4.2 and HCV 4.3).

PT DIN & PT DWT has HCV management plan (Monitoring and Action Plan) period 2012 to 2015 which de-cribes the activities planned for each identified HCV in PT DIN’s estate and PT DWT’s estate such as training and communication to society in around estate and employee, inventory of regulations regarding the protection of flora and fauna are protected, installation of boundary stone and sign board for HCV areas, security patrol in HCV areas, inventory of fauna and flora in HCV 1.2 and HCV 1.3 areas (block of conservation No.I), inventory and maintenance of seedling for Dipterocarp species, rehabilitation for HCV areas, monitoring of fauna survey in block of conservation No. V and implementation of camera trap in block of conservation No. III – V, prepara-tion of guidelines for management of riparian, monitoring of the ecosystem of river, identification, monitoring of HCV areas regularly and evaluation of areas that have high erosion potential. It has been implemented for all plans.

To prevent inappropriate hunting and collecting activities within their area (block of conservation No. IX – XII and Muara Wahau River), the company established a mechanism for Ilegal fishing and hunting where compa-ny also made sign boards and has periodic patrolling programmes by security.

Some HCV boundaries and signboard has constructed and visibly maintained on the estate as seen on the filed with signboard of “prohibited of spraying near riparian” (Block H42), and signboard of “prohibited of hunt-ing fauna” (Block G42 and Block I50).

The organization has carry out socialization to employees (January - February, 2013) and society in around estate (February 28, 2013) about protected species and HCV, signboard of fauna protected / ERTs (endan-gered, rare anda threatened), and signboard about HCV, Blew river, Kenden Besar river, Sung river, Muara Wahau river, prohibited of spraying near riparian or water source, and prohibited of hunting .

PT DIN & PT DWT has appointed a dedicated officer to monitor HCV management plans and activities. They are SHE-Conservation department’s officer. They will be assisted by several estate officers in carrying out their daily activities. All team members were trained on management and monitoring of all HCVs, and the training was conducted by Tropenbosch consultant in Yogyakarta year 2011. Compliance status: Full Compliance

Criterion 5.3: Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner

Findings: The company has a documented Environmental Impacts and Aspects Identification and Evaluation, dated 16 January 2013 for PT DIN & PT DWT, and February 1, 2013 for PKS3. This document included an identi-fication of risks as well as a calculation matrix for risk levels and likelihood of occurence. For PT DIN & PT DWT, the sources of waste and pollution identified include hazardous wastes such as oil spills, used oil, paint cans, used battery, fertilizer bags, used chemical containers, domestic wastes, etc. For Mill 3, the sources of waste and pollution were identified according to different sections of the mill, i.e.: - Process: rubbish, oil spills, empty fruit bunches, particles of dust, ash, mixtures of aluminum sulfate and hydrochloric acid, fumes from generators, etc. - Workshop: iron powder, and used oil - Laboratory and Effluent: chemical spills, wastewater, chemical containers




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- Mill compound: Hazardous wastes PT DIN PT and PT DWT implement their SOP no. SOP-AGR-035-R00 regarding Waste Management, which states that wastes should be segregated to hazardous waste, organic waste and inorganic waste. Volumes of hazardous wastes will be recorded and compiled for submission to licensed contractors, while organic waste will be disposed in compost pits, and inorganic wastes will be disposed in estate landfills. It was sighted at all estates that waste management is done according to this SOP where domestic wastes are segregated and disposed on separate estate pits. All estates in PT DIN and PT DWT maintains individual estate records of amounts of each type of hazard-wastes produced in Hazardous Waste Inventory Records, for example for Long Kejiak1 estate, records are maintained for hazardous wastes such used oil, oil containers, chemical containers, paint containers, con-taminated rags, used batteries, oil and air filters, including dates of collection and dates when the wastes were set to the mill. The estates also maintain records of delivery notes of hazardous waste to the mill, which are sent by each estate to the mill once a week. The mill also maintains detailed inventories of each type of hazardous waste produced at the mill and re-ceived from the estates, including dates and amounts collected. The mills also have records of waste collec-tion manifests from licensed contractor CV Sumber Agung where hazardous wastes are collected approxi-mately once a month. Sample manifests dated 4 July and 30 July 2013 were checked and information found to be consistent with the mill’s inventory records. The estates also maintain records of amounts of inorganic wastes collected for disposal into landfills, as sighted in a sample logbook stating daily amount of full bags inorganic wastes collected from each estate division for Long Kejiak 1 estate. Compliance status: Full Compliance

Criterion 5.4: Efficiency of energy use and use of renewable energy is maximized.

Findings: The company was recorded the usage of fossil fuels started in early 2012. Records of monitoring renewable energy use and its efficiency analysis (energy/ton CPO, or energy/ton palm product), sighted monthly record for monitoring of electricity usage for year January 2013 until July 2013, found the usage is within19.18 to 21.34 Kwh / tonnes FFB. Sighted also the usage of shell & fiber record for the boiler from year 2012 January to December & January to July 2013 which is monitored on a monthly basis. The company has no estab-lished standard amount for renewable energy usage e.g. for usage of fiber & shell for boiler. This is a poten-tial for company improvement for renewable energy consumption. Records of monitoring of fossil fuels use for operational reason and its efficiency analysis. Sighted monthly record for monitoring of diesel for year 2012 & 2013 until July, found the usage is between 0.2860 – 0.4007 litres / tonnes of FFB and if converted to ton/CPO was1.67 – 5.32 litres/tonnes of CPO. Standard amount for this monitoring has not been established. It is stated that fossil fuel consumption as environmental aspect as consideration to make environmental objective and program, company feel free to decide when they will make the program and how they put the case as priority or not. In this case PT Dharma Satya Nusantara palm Oil Mill 3 decided that reduce fossil fuel is not priority for year 2013 but for next year as stated on their environmental program. In the Estate of LK 1 and ME 2, records of the usage of energy from fossil fuels based on all activities in the estate, and from 2012 until July 2013 usage of the energy is not fluctuating. From the usage energy record-ed, it was concluded is: 1. Usage fossil fuel for electricity is being reduced, and the company has plan to replace fossil fuel usage

with solar energy. 2. Until now, the company was have 1 (one) solar energy project in security office. 3. For the next the solar energy will be use in all of housing in the estate. 4. The company has plan for methane capture for renewable energy development as a source of energy in

the future. Compliance status: Full Compliance




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Criterion 5.5: Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations, as identified in the ASEAN guidelines or other regional best practice.

Findings: The company implements a zero burning policy and therefore has not done any land clearing using fire. The company has work instruction no. IK-AGR-OLP-01-R01 which states that land clearing is done through zero burning. For PT DIN, sighted a work order letter made with contractor PT. Baja Sarana Sejahtera for rental of heavy equipment and land clearing activities conducted in January to February 2005. From the work order letter it was seen that the type of land clearing activities includes preparation of culvert. Land clearing though burn-ing was not included in the list of activities required. The first planting at PT DWT was in 2007 and is still continuing in year 2013. From the Work Order for land clearing activities, in 2008 and 2012, PT DWT engaged the contractor CV. Indo Prima Lestari for land clear-ing work, e.g. at Melenyu 2 for area of 1137 ha as from work order no. 024/DWT/ME2/2008, and at Melenyu 1 estate Division 2,3,4 and 6 for a total area of 487ha, as seen from work order no. 004/DWT/ME1/2012 dated 02/01/2012. In these work orders, it is specified that all land clearing work is done through mechanical chipping and piling with zero burning, and burning is prohibited. Sighted in the field, there is no evidence of land clearing through burning in any of the company's estates. The company has SOP-AGR-037-R00 regarding Occupational Health and Safety and Environment dated 1 March 2013, including Emergency Response Procedures (ERP) in case of land fires. Every estate under PT DIN and PT DWT has an emergency preparedness & response team for land fires comprising the team co-ordinator, estate Emergency Response chief, medical squads head, and further divided into security teams, fire fighting team, rescue and evacuation squads, and communications and logistical support teams. There are records of trainings and emergency response simulations including photos done at LK1 estate on 30 April 2013, LK2 estate on 10 June 2013 and LK3 estate on 1 July 2012. For PT DWT, training and fire simu-lation at Melenyu 1 was done on February 15 2013, and for Melenyu 2, 3 and 4 estate staff on 18 February 2013. The simulations involved the emergency response team, mandores from every division, security guards and workers. There are also records of fire simulations, including photo, done at PT DWT for Melenyu 1 on January 17, 2013, Melenyu 2 on January 31, 2013, and Melenyu 3 on January 18, 2013. However, there was no fire simulation done at Melenyu 4 estate, and the company carried out immediate corrective action during the audit by conducting a fire simulation at ME4 estate on 30 August 2013, which was observed by the audit team. In Mill 3, there are fire extinguishers located throughout the mill, including office, hazardous waste ware-house, workshop, and general mill compound. All extinguishers are checked and all fire extinguishers checked were at the correct pressure. For PT DIN & PT DWT, there are fire extinguishers throughout various estate locations e.g. office, fuel & oil store, chemical warehouse, workshop, housing, etc.. All units are inspected annually by the supplier and all fire extinguishers checked were at the correct pressure. There are also sand and water containers and the estates warehouses and housing. At every estate as seen at Long Kejiak 1, Melenyu 1 and Melenyu 3 es-tate, there are mobile water tanks on standby with water, and fire monitoring towers. Each estate keeps a daily report of fire points sighted from the fire observation tower, and so far there have been any fire points sighted as seen from sample reports. Compliance status: Full Compliance

Criterion 5.6: Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored.

Findings: The company has a documented identification of all greenhouse gas sources at the mill and the estates. The sources of GHGs at the estate include land clearing, crop sequestration, manuring, pesticides, fossil fuel usage, and peat soils and conservation efforts, while sources of GHGs at the mill include POME, fossil fuel usage, and excessive usage of electricity. The company has also done a calculation of GHG emissions




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in year 2013 including, emission calculation for every source at the mill and estates. Based on these calcu-lations, the total annual emissions is -24,681,623 kg CO2eq/year for PT DIN and -29,136,069 kg CO2eq/year and 62,582,788 kg CO2eq/year for the mill. The total emissions calculated for the entire com-pany is 0.012 tCO2eq/tCPO. As seen from the mill's UPL/UKL implementation report for January for June 2013, quality of POME dis-charged for land application is tested once a month while groundwater quality analysis is done once every 6 months by accredited laboratory Sucofindo in accordance with the mill's license for land application. All analysis results are observed to be within the legal standards. Other parameters which are required to be tested once every 6 months include ambient air quality in front of the mill office and worker's housing near the mill, which were last tested 21 September and December 2012 respectively, boiler 2 emissions tested on 12 May 2013 and boiler 1 emissions tested on 31 January 31, genset 3 emissions tested on 4 July 2013, genset 2 emissions tested on 30 March 2013 and genset 1 emissions tested on 28 February 2013, vibration and noise tested on 2 June 2013 and clean water tested on 30 March 2013. It was found that all analyzed parameters did not exceed the applicable legal standards, except for noise which was found to be at 96.4db at the mill genset area and 98.7 db at the kernel operational area. This is controlled by providing earmuffs protection for the mill workers.\ The mill has implemented a plan for reduction of pollution and emissions through reduction in usage of fossil fuels, plantings of 'trembesi' trees to absorb greenhouse gases and testing of gas emissions from estate ve-hicles. The plan has been implemented since year 2012, where all planned plantings of Trembesi trees already been carried out and vehicle emissions testing has also been done. All estates under PT DIN and PT DWT also have a Greenhouse Gas Monitoring and Mitigation Program for aspects such as land clearing, manuring, usage of herbicides, and usage of fossil fuels for year 2013. The plan includes conservation of river riparian buffer zones, planting of fruits trees and other tree species to ab-sorb greenhouse gas emissions and avoiding excessive usage or purchase of gensets. POME management is carried out according to the mill's work instruction for Operation and Control of Palm Oil Mill Effluent Ponds dated 1 August 2012. The mill has 8 effluent ponds including 1 cooling pond, 1 mix-pond, 3 anaerobic ponds, 2 aerobic pond and 1 facultative pond. Mill effluent for land application is pumped from pond 7 and records of effluent debit, pH, pond level are recorded daily in a logbook. It was seen from the logbook that daily mill effluent debit is between 500 - 1500 m3. The company carries out land application in accordance with their license for land application no. 660.41/K.141/2013 dated 27 February 2013 and val-id for 2 years. According to the license, blocks permitted for land application are blocks H40, H42-49, and I43-I46 with total area of 360 ha. The BOD of the effluent applied cannot exceed 5000mg/l and pH value shall be between 6-9. Chemical parameters required to be analysed once a month include BOD, COD, oil & grease and trace metals while debit and pH is required to be monitored daily. Control groundwater point at block H49 and control non-application area at block G50 is required to be analysed once every 6 months, while soil quality analysis and land application areas and control block at 6 different soi depths is required to be tested once a year. The company carries out all tests according to the requirements of the license, e.g. the last soil quality test was done on 23 November 2012. Compliance status: Full Compliance Criterion 6.1: Aspects of plantation and mill management including replanting that have social im-pacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement. Findings: The company has social impact assessment (SIA) owned by PT Dharma Intisawit Nugraha and PT Dewata Sawit Nusantara, Kutai Timur Regency, Province of East Kalimantan on December 2011, made by Daeme-ter Consulting. The report contain the impact of the company to community, employee, and local govern-ment, and covers positive and negative impacts with evidence of participation of local communities and all affected parties. The company has management and monitoring plan for identified social impact prepared with the participa-tion of local communities and relevant stakeholders. There is report of management and monitoring of so-cial impact for year 2013 both in PT DIN and PT DWT, as seem from the implementation reports of the Envi-ronmental Management Plan and Environmental Monitoring Plan (RPL/RKL) for 1st semester January-June




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2013 PT Dharma Intisawit Nusantara, PT Dewata Sawit Nusantara. Socio-cultural and economic aspects are managed and monitored such as: employment opportunities, farming best practices, public health, oc-cupational safety and health, increase / improvement of social amenities, education and health, perceptions and negative attitudes of society, land traffic accidents, community perception and behavior. There is evidence of report submission to East Kutai Regent Cq. Head of the Environment Agency dated August 23, 2013 and the Governor of East Kalimantan Cq. Head of the Environment Agency. Compliance status: Full Compliance

Criterion 6.2: There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties.

Findings: The company has communication and consultation procedure no. 0215B/SWA-CSR-WHU/VI/2012. Annex no. 1 of the procedure explains about conflict/complaint/claim handling including for land claim, worker is-sues and job transcation. Incoming communication and consultation can be verbally or written accepted to CSR office to explain about the problem occur including relevant evidence if needed. The mechanism has been communicated to the local communities and the workers. There is a number of incoming letters of communication between company and head of sub regent Muara Wahau regarding request of company’s employee information and its response as explained on principle 1.1 above. Similar with incoming request of information as explained on CR. 1.1 above all incoming aspiration from local communities will be record-ed on a log book for incoming request of information and aspiration (FM-STD-30-ROO). PT DSN Mill 3, PT DIN and PT DWT all have an updated list of stakeholders, the last version is stakeholder list on May 30, 2013 covering stakeholders from surrounding villages, i.e. Benhes, Diak Lay, Dabeq, Muara Wahau, Nehas Liah Bing, Dusun Jabdan, Dusun Long Bau, Miau Baru, SP, community leader group and head of worker union from all workers. Records of local communities’ aspiration and its responses are well maintained at the CSR office; most of incoming aspirations is about request of donation. There are number of incoming request of donation as recorded on a log book. The company assigned a dedicated person responsible for consulting and communicating with local com-munities. As determined on the procedure no. 0215B/SWA-CSR-WHU/VI/2012 there is a CSR team who has responsibility for communication and consultation to relevant parties, including email addresses and phone numbers of the team. Compliance status: Full Compliance Criterion 6.3: There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties. Findings: The company has an open system dealing with communication and consultation with the communities for the conflict and dispute resolution as determined on procedure no. 0215B/SWA-CSR-WHU/VI/2012. It was signed together with by all communities on June 7, 2012. While for internal purposes, documented system for dealing with complaints and grievances are available on company regulation part VIII, article 37 regarding internal communication. Furthermore, employee employ-ee complaint handling is determined on SOP_AGR-054-R00 valid from June 01, 2013. This SOP contains mechanim for submission of complaints and handling including the company’s facilities, houising etc. So far there is no written complaint from the worker it was confirmed also through interview with the worker and their families in dormitories. Compliance status: Full Compliance Criterion 6.4: Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.




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Findings: The company has an open system dealing with communication and consultation with the communities for the conflict and dispute resolution was signed by all communities on June 7, 2012 i.e. SOP No. no. 0215B/SWA-CSR-WHU/VI/2012 Appendix 2 which covers identification, calculation and compensation pro-cedures to communities. Records of identification of people entitled to receive compensation were sighted, such as: Payment for land compensation for farmer group from Long Leis Blom Mehling area dated April 7, 2013 reagarding land claim 30 ha in Long Kejiak HGU PT DIN. The records are well maintained in CSR office including records of ne-gotiations processes and the details of compensation settlements, such as negotiation for this farmer group dated March 13, 2013 signed by farmer group head and CSR head PT DSN. There is also negotiation rec-ords with a number of land claimers in Melenyu 1 of PT Dewata dated August 04, 2011. The company made land dispute map which has agreed by all parties. Compliance status: Full Complianace

Criterion 6.5: Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages.

Findings: There is has a decree of Directors about the change of the minimum salary, number 005/DIR/I/2013 for PT DIN; number 007/DIR/I/2013 for PT Dewata; number 002/DIR/I/2013 for POM 3 dated January 15, 2013 was state that the minimum salary for employee is Rp. 1,765,000 per month, valid from January 1st, 2012 based on decree of Governor of East Kalimantan number 561/K.830/2012 dated December 04, 2012 which state that the minimum salary is Rp 1,765,000 per month. The company has a list of salary for all employees in every estate which shows the salary paid is in compli-ance with the Governor and Directors decree. Example salary slips on March 2013, for level 1A Melenyu 4 estate and harvester salary fropm Melenyu 2 estate with gross salary is Rp. 1,785,000. There are salary deductions i.e. for worker insurance Jamsostek Rp 35,700 and Astek Rp. 14,994. Working regulations are available in each company: 1. PT DSN mill, was authorized by “Direktur Persyaratan Kerja, Kesejahteraan dan Analisa Diskriminasi”

Ministry of Labour and Transmigration, Republic of Indonesia according to decree letter No. Kep.311/PHIJSK-PKKAD/PP/IV/2013. Valid from April 28, 2013 to April 27, 2015

2. PT DIN, was authorized by “Direktur Persyaratan Kerja, Kesejahteraan dan Analisa Diskriminasi” Minis-try of Labour and Transmigration, Republic of Indonesia valid from April 28, 2013 to April 27, 2015 ac-cording decree letter No. Kep.316/PHIJSK-PKKAD/PP/IV/2013

3. PT DWT was authorized by “Direktur Persyaratan Kerja, Kesejahteraan dan Analisa Diskriminasi” Min-istry of Labour and Transmigration, Republic of Indonesia valid from April 28, 2013 to April 27, 2015 according decree letter No. Kep.320/PHIJSK-PKKAD/PP/IV/2013

Working regulation had communicated with employee on may 04, 2013 in PT DIN; July 02, 2013 in PT DSN Mill 3 and August 02, 2013 in PT DWT. Working regulation always communicated regularly during morning briefing as well as published in every housing area and meeting room. Both PT DSN mill, PT DIN and PT DWT also has working agreement between employee and each compa-ny, as seen on working agreement for harvester in Melenyu 4, and sprayers in Long Kejiak 1. The company provides adequate housing for all estate and mill employee. The public facilities were provid-ing such as clinic, mosque and sport facilities. There are also primary school within the area of company, and primary school, kindegarten, and junior high school established by the “Yayasan Darma Setya Nusanta-ra” foundation, and also provides school buses for children to attending school from the outside and inside the company. The company provide clean water for daily consumption at each housing area; there are water purifiers for daily water consumption, such as at Long Kejiak 3, division 10 and divison 4. The company has a documented agreement with contractors as sighted from contract between PT DSN Mill 3 with a contractor for land clearing and FFB transporter that they are to abide with local labour laws. Some




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clauses in the contract include compliance to labour laws. There was also evidence sighted that FFB con-tractors for transportation namely CV Berkat Rejeki and CV Dita Jaya Abadi have registered their 21 em-ployees under the social security program “Jamsostek”, including coverage for work accident insurance and life insurance. Compliance status: Full Compliance Criterion 6.6: The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel. Findings: The company has a documented regulation 2013 – 2015 period, regarding freedom for association for workers that is available in several locations. In point ‘4’ company regulation it is stated that wokers are enti-tle to join associations for workers or to be a member/leader of workers association based on the govern-ment regulation. Communication regarding freedom for association was carried out on May 01, 2013. A worker union in PT DIN was established on December 12, 2012 based on meeting decision December “Forum Permusyawarahan Organisasi” (Organization discussion forum) No. 001/SP.DIN/FPO/XII/2012 for period year 2012-2014, with 801 members and 12 union committee. There are minutes meeting such as: 1. June 25, 2012 regarding salary deduction issue 2. July 16, 2013 regarding conflict resolution between workers and management. There are regular meeting records such as; December 12, 2012; January 19, 2013, February 13, 2013 and July 27, 2013, this is meeting coordination for internal worker union. Worker union for PT DWT was established on November 23, 2012 according to meeting decision “Forum Persmusyawaratan Organisasi (Organization discussion Forum )No. 001/SP.dwt /FPO/XI/2012” year 2012 period 2012-2014, with total of 453 members. This union has been registered to Local Manpower and Transmigration Office Kutai Timur District as stated on decree letter no. 560/148/HJ dated January 22, 2013. There are regular meeting records such as December 26, 2012; January 9, 2013; March 13, 2013 and May 23, 2013. Compliance status: Full Compliance Criterion 6.7: Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education programmes. Children are not ex-posed to hazardous working conditions. Findings: The company policy regarding child labour was defined since year 2011 by Head of management System & Human Resources Department, and informed to employees through an internal memorandum no: 009/HRA/VII/2011 dated on July 12, 2011. The company’s regulation for period 2013 to 2015 states under article 5 that employee recruitment shall not below 18 years according to applicable laws and regulation. During the audit there is found edence of employment of a worker less than 18 years old listed on workers list at ME 4 estate which recruited on April 1, 2013. It was also stated on the working agreement his date of birth on May 20, 1995. This is raised as non conformity Compliance status: Non Compliance NCR 2013-01 of 02 There was an underaged worker found on the list of workers at ME 4 estate, who was recruited on April 1, 2013. It was stated on the working agreement his date of birth is May 20, 1995.

Criterion 6.8: Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited.




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Findings: An equal opportunities policy is stated on approved company’s regulation for period of year 2013-2015 sec-tion II article 5.3 signed by the Director for PT DIN, PT Dewata and PT DSN mill 3. The policy was informed only to employees and communities surrounding company’s location. Based on information from the local communities, company has regularly provided information about job vacancies in PT DSN group every year. Job vacancy announcement and it was distributed to 15 villages surrounding company’s area e.g. Muara Wahau village, Dabeq village, Nehas Liah Bing village, Long Wehea village etc. As sighted on company’s list of workers and employee there are approximately 1376 workers locals from East Kalimantan Province from level permanent workers, 3 down level (Supervisor level) until 4 up level (estate assistents) including office or estate staff. There is no evidence of discrimination. Workers of all ethnicities and religions, including Muslims, Catholics and other Christian denominations are provided with their respective places of worship such as mosques and churches in each estate. No workers interviewed on-site complained about any form of discrimination from the management of the estates or mill. Compliance status: Full Compliance

Criterion 6.9: A policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied.

Findings: The management of PT DSN mill 3, PT DWT and PT DIN estate has a written policy regarding prevention of sexual harassment and all other forms of violence against women, as well protection of their reproductive rights. The company’s regulation for 2013-2015 and its extension clause 12 page 18 contain prevent sexual harassment. The company established an SOP to for handling sexual harassment incidents as seen on SOP - AGR- STD-13R.01 issued on April 23, 2012. Meetings to create awareness on this policy were con-ducted in every estate housing area such as in Long Kejiak 1 and 2 on December 26, 2012; January 09, 2013 and march 2013. The company regulation was sent to all employee and workers and displayed at each plantation division office as seen in Long Ketjiak afdeling 10, Melenyu 2. There is an internal memo-randum issued by the Chief of Executive Human Reource i.e. letter No. 010/HRA/VII/2011 dated 12 July 2011 and additional permit letter from Head MS & HRA dept dated June 27, 2012 regarding prohibiting pregnant and breastfeeding woman to conduct chemical spraying. Protection of woman’s reproductive rights is defined clearly on company regulation 2013-2015 clause 32 regarding maternity leave and menstruation leave There is no sexual harassment incident reported up until the audit time. The company established a Gender Committee, with representatives from each estate division. There is evidence of implementation of the reproductive rights policy, for example, the company has copies and records of menstruation leave and maternity leave forms applied by workers and these records are kept by the HRD department, estate clinic and estate office. The company has a grievance mechanism defined in procedure SOP-AGR-STD-13-R01 for grievances, vio-lence against women and protection of reproductive rights, all complaints should be recorded on a form, i.e. “Handling of Sexual Harassment Complaint Form” (FRM-STD-005) according to procedure “Handling of Complaints of Sexual harassment SOP-AGR-STD-13-R01. The company has also established a gender committee as a more specific grievance mechanism for female workers. As determined on the procedure, the gender committee will approach the parties involved to attempt to resolve the issues. All relevant rec-ords of gender committee activities will be stored properly in the committee office. Compliance status: Full Compliance

Criterion 6.10: Growers and mills deal fairly and transparently with smallholders and other local businesses.

Findings: The company allows the public to access current and past prices for FFB. Current FFB prices and previous day FFB prices are clearly published. Prices of FFB based on prices was determined by Estate Office ac-




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cording to Plantation local Office East Kalimintan Province June to July 2013 period. According to interviews with several subcontractor during the onsite audit, the company has contractual agreements with contractors which are understood by all parties, such as: 1. Purchase contract for FFB with light equipment rental no. 001/DSN/PKS3/2013 which is valid since

June 28, 2013 to December 13, 2013. Payment term will be 15 days. 2. Purchase contract for CPO and palm Kernel transporter no. 004/DSN/PKS3/2013 valid since January

2, 2013 to June 30, 2013 And the company made agreed payments in timely manner, with evidence as follows: 1. Evidence payment for contract no. 006/DSN/PKS3/2012 done as per agreed payment time i.e. July 22,

2013. 2. Evidence payment for contract no. 001/DSN/PKS3/2013 done as per agreed payment time i.e. July 22,

2013. Compliance status: Full Compliance

Criterion 6.11: Growers and millers contribute to local sustainable development wherever appropriate.

Findings: The company makes contributions to local communities through CSR company program in 2012, with evi-dence as follows: Minutes activities dated on February13, 2013 and April 10, 2013 regarding donation PT DSN group for stage 1 airport Miau Baru village construction. The minute’s activity was signed by head of Sub district Kongbeng, the contractor and company’s representative. Compliance status: Full Compliance Criterion 7.1: A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations. Findings: There are new development area in PT Dewata Sawit Nusantara in all estates (ME1, ME 2, ME 3 and ME4) as well as in PT Dharma Intisawit Nusantara (LK 2 and LK 3). During land clearing process in new devel-opment area PT DIN between 2005 – 2007 there are identified 159 Ha riparian zone areas were cleared i.e. Long Kejiak1 estate 74 Ha and Long Kejiak 2 estate (LK2 estate) 85 Ha. But now, the riparian buffer zones which have been planted are now protected by the company through the red markings in palm oil tree and signboards which state no chemical application is allowed at marked trees. The company has social impact assessment (SIA) owned by PT Dewata Sawit Nusantara, Kutai Timur Re gency, Province of East Kalimantan on December 2011, made by Daemeter Consulting. The report contains the impact of the company to community, employee, and local government, and covers positive and nega-tive impacts with evidence of participation of local communities and all affected parties for new planting area in Melenyu 3 and Melenyu 4 estate. The company has management and monitoring plan for identified social impacts prepared with the participa-tion of local communities and relevant stakeholders. There is report of management and monitoring of so-cial impact for year 2013 in PT Dewata Sawit new development area. Records of development program for smallholders are kept, in accordance with the scheme and relevant laws, there are a number of minutes meeting regarding to planning for establishment of smallholder scheme program in PT Dewata Sawit Nusantara: 1. Minutes meeting on October 24, 2012 with farmer group Long Pekau Wei Guaq (Kelean Blom Kejah Co-operation) Nehas Liah Bing village, regarding communication of plantation management and plantation maintenance attended by 26 participant. 2. Minutes meeting on October 30, 2012 withfarmer group Keangkong Indah, (Kelean Blom Kejah Coopera-tion) Nehas Liah Bing village was attended by 21participant.




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Criterion 7.2: Soil surveys and topographic information are used for site planning in the establish-ment of new plantings, and the results are incorporated into plans and operations.

Findings: PT DWT has a document regarding 'Technical Considerations on Land Usage no. 460/21/PT-PgT/BPM-44/I-2008, dated 4 January 2008 prepared by the Land Department of Indonesia. The document includes land survey results which states that the area of 13,777.15 ha primarily consists of seconday forest and no marginal soils. Soil types identified are Ultisols (11,675.09 ha) and Inceptisols (1954.61ha), with topography ranging from 0 - 15% and only a small area of 139.35 ha with slope of 15-25% which has already been en-claved as HCV area by the company. The document also includes soil map with information on the soil wa-ter depth, texture, erosion levels and drainage. The company implements best practices for development of the land as confirmed though site visits and ob-servations of soil types. Compliance status: Full Compliance

Criterion 7.3: New plantings since November 2005, have not replaced primary forest or any area re-quired to maintain or enhance one or more High Conservation Values.

Findings: During land clearing process in new development area PT DIN between 2005 – 2007 there are identified 159 Ha riparian zone areas were cleared i.e. Long Kejiak1 estate 74 Ha and Long Kejiak 2 estate (LK2 es-tate) 85 Ha. But now, the riparian buffer zones which have been planted are now protected by the company through the red markings in palm oil tree and signboards which state no chemical application is allowed at marked trees. Based on information on HCV document assessment, the locations cleared were not HCV ar-eas, but according to to Government Regulation number 38/2011, the riparian bufferzone should be protect-ed, and the company has taken measures to protect the riparian zone. For PT DWT, the company has done land clearing between 2007 – 2009, i.e.: 1. In year 2007, the company carried out land clearing of 59 Ha in Melenyu 2 estate Division 11, and now

the location is named Block H49, H51, H52. This area was cleared at the end of 2007 in December. The area includes a riparian bufferzone on Block H51 with area of 5 Ha or 848 meter with a width 5.50 m cross the area, and the riparian bufferzone protected by the company is 5 meter in width from the riverbanks

2. In year 2008, the company carried out land clearing of 1,381 Ha from January until December in Melenyu 2 estate, Division 10, 11, 12. This area contained an identified riparian bufferzone of which 61.9 Ha was cleared, and now the company is protecting the riparian bufferzone through restricting chemical application, marking the trees at the buffer zones and making signboards informing not to ap-ply chemical there.

3. In year 2009, the company carried out land clearing 3,146 Ha from January until December in Melenyu 1 estate 655 Ha, Melenyu 2 estate 1,706 Ha and Melenyu 3 estate 785 Ha, with riparian bufferzone ar-ea of 156,91 Ha, and the company has protected the riparian bufferzone through restricting chemical application marking the area and making signboards.

Maps showing plan and implementation of land clearing activities in accordance with HCV identification were available in the estates office both PT DIN and PT Dewata. It was confirmed that land clearing activities were carried out in accordance with land clearing plann. Compliance status: Full Compliance

Criterion 7.4: Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided.




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Findings: In Melenyu 4 estate, the company is still carrying land clearing activity. Based on a slope map of the area, Melenyu 4 estate has identified slope areas of more than 25 degree. Based on SOP-AGR-OLP-01-R01 for land clearing which is valid from February 1st, 2012, page 3 of the SOP states that for land with slope over 12 – 25 degree, terracin shall be carried out, and minimum widths of the terrace is 3 meter based on soil condition and soil depth, and for areas with slope more than 25 degree, land clearing is not recommended. Based on company’s HCV document assessment, the company has protected the locations with slopes above 25 degrees and designated them as HCV areas, and for sloped areas below 25 degrees, the compa-ny has applied terrace contours, as seen during site visits Block C62 and C64 in Melenyu 4. Based on soil map there not peat soil, fragile and marginal soils both in PT DIN and PT Dewata Sawit. Compliance status: Full Compliance Criterion 7.5: No new plantings are established on local peoples’ land without their free, prior and in-formed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institu-tions. Findings: Social and environmental impact assessment document for new planting area in PT Dewata Sawit Nusanta-ra which include analysis of both positive and negative environmental and social impacts was made incorpo-rated with SIA document that made by Daemeter consultant in December 2011, the document was made with the participation of affected parties, as proved by minutes meeting with local stakeholder and list of meeting participant, attached on the SIA document. Information dissemination programs prior to new plantings activites was done as seen from minutes meeting on November 2012 between PT Dewata Sawit and group of Sei Sentiang community regarding land clearing planning for PT Dewata Sawit Nusantara Melenyu 1 estate, the meeting was attended by 15 participants. There is agreement between that community group and company regarding land compensation and road construction planning. A 2nd discussion was conducted on December 15, 2012 attended by 11 participants, including members from local institutions such as community leader Muara Wahau Village and Head of sub district Muara Wahau and Kongbeng. There is a map for agreed location in Melenyu 1 estate block G and H92-95 with total area 67 ha. Records of land compensation payment were sighted and well maintained in CSR office i.e. receipts of compensation payment of Rp. 211,300,000. Records of payment land compensa-tion for community group from Long Sep village were also maintained. Compliance status: Full Compliance

Criterion 7.6: Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreement

Findings: Identification and assessment of customary and legal rights was carried out with the involvement of relevant government agencies and local communities on July 7, 2011 for new planting area including identification of land claimed by farmer groups Pulau Benia and Bangkliah from Miau Baru village. The company has 2 as-sessments team to identify land claimed by farmer groups. There is evidence of meeting with PT Dewata Sawit and farmer groups Pulau Benia and Bengkilah in Miau Baru village that is facilitated by the head of sub district Konbeng on July 14, 2011 involving local police office, community leader Miau Baru, head of vil-lage, and PT Dewata Sawit management. The company has procedures to identify people entitled to receive compensation i.e.SOP no. 0215B/SWA-CSR-WHU/VI.2012 attachment 2. Records of negotiation process and/or compensation settlements are available. Such as negotiation pro-cess for land compensation in Miau Baru village with Pulau Benia farmer group dated May 31, 2012. There is agreement for land dispute in Melenyu 1 esatte PT Dewata Sawit dated May 31, 2012. That was signed by representative from Miau Baru Village and Melenyu 1 estate PT Dewata Sawit for area 400 ha with value Rp 1,500,000/ha etc. It was sighted transmittal note dated June 7, 2012 for the signed agrement by one vil-lager. There is a record from Bekilah farmer group dated December 27, 2011 regarding receipt of land compensa-tion payment for Block J96 to J101 PT Dewata Sawit Melenyu 1 estate for total 176 ha. Minutes of meeting




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were signed by farmer group leader and company’s representative. A copy of the agreement was submitted to the relevant institution on July 13, 2012. Complete documented processes and outcomes of any compensation claims are available in CSR office and had been confirmed through interviews with respective parties Compliance status: Full compliance

Criterion 7.7: Use of fire in the preparation of new plantings is avoided other than in specific situa-tions, as identified in the ASEAN guidelines or other regional best practice.

Findings: PT Dewata Sawit Nusantara and PT Dharma Intisawit Nugraha has a zero burning policy following govern-ment regulation regarding prohibition for using fire during land preparation and waste disposal. It was sight-ed that the policy is well implemented during site visit to new planting area in Melenyu 3 & 4. The company did not use fire, they used mechanical land clearing process. The company has SOP-AGR-037-R00 regarding Occupational Health and Safety and Environment dated 1 March 2013, including Emergency Response Procedures (ERP) in case of land fires. Every estate under PT DIN and PT DWT has an emergency preparedness & response team for land fires comprising the team co-ordinator, estate Emergency Response chief, medical squads head, and further divided into security teams, fire fighting team, rescue and evacuation squads, and communications and logistical support teams. There are records of trainings and emergency response simulations including photos done at LK1 estate on 30 April 2013, LK2 estate on 10 June 2013 and LK3 estate on 1 July 2012. There are also records of fire simu-lations, including photo, done at PT DWT for Melenyu 1 on January 17, 2013, Melenyu 2 on January 31, 2013, and Melenyu 3 on January 18, 2013. However, there was no fire simulation done at Melenyu 4 estate, and the company carried out immediate corrective action during the audit by conducting a fire simulation at ME4 estate on 30 August 2013, which was observed by the audit team. There are fire fighting facilities available at new planting areas such as Melenyu 4 estate at open areas, in-cluding water tanks, plastic pails, sacks and mobile water tanks on standby with water. However these fire fighting equipment are not adequate to prevent potential fire which may spread from nearby community land, land, which is cleared by burning. This was raised as a nonconformity. Melenyu 4 estate has an indicator signboard to indicate the level of fire hazard status. Compliance status: Non Compliance NCR No. 2013-02 of 02 The company provided infrastructure to prevent fire on land clearing/new planting area, such as water tanks and plastic pails, however these will not effective to prevent potential fire which may spread from nearby community land, which is cleared by burning.

Criterion 8.1: Growers and millers regularly monitor and review their activities and develop and im-plement action plans that allow demonstrable continuous improvement in key operations.

Findings: Management review is conducted quarterly, and the review topics cover aspects related to: • Reduction in the use of certain chemicals • Environmental impacts • Waste reduction and energy efficiency • Pollution and emissions reduction • Monitoring Realization Programme of Mitigation of Green House Gas • Social impacts Last management review was conducted on May 2013 as well. The company has conducted environmental maintenance very well, this can be seen from the waste domes-tic managament activity and hazardous handling management. The company has also carried out good




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maintainance of riparian buffer zones, where plantings of vertiver grass and cover crops and also reforesta-tion with species such as Shorea sp has been done along riparian bufferzones. The company has also pro-tected the riparian buffer zones from chemical activities through markings on palm oil tree and making sign-boards in location area. The mill has implemented a plan for reduction of pollution and emissions through reduction in usage of fossil fuels, plantings of 'trembesi' trees to absorb greenhouse gases and testing of gas emissions from estate ve-hicles. The plan has been implemented since year 2012, where all planned plantings of Trembesi trees already been carried out and vehicle emissions testing has also been done. All estates under PT DIN and PT DWT also have a Greenhouse Gas Monitoring and Mitigation Program for aspects suchs as land clearing, manuring, usage of herbicides, and usage of fossil fuels for year 2013. The plan includes conservation of river riparian buffer zones, planting of fruits trees and other tree species to ab-sorb greenhouse gas emissions and avoiding excessive usage or purchase of gensets. PT DIN and PT DWT have a plan for reduction of usage of certain chemicals. Based on an Internal Corre-spondence memo dated 30 November 2012 to all estate heads located at East Kalimantan region, there is no budget for purchase of paraquat in year 2013 and the estates are only allowed to finish stock from year 2012. Evidence of reduction of usage of paraquat was as explained under CR4.6 Compliance status: Full Compliance

3.2 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions A total of 2 nonconformances were identified during the main certification assessment all findings are catego-rized as minor non-conformities. The company has taken corrective action against these as well, and for those which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below:

Criterion 6.7. (Minor indicator 1): Records of implementation of company policy on worker age requirements.

Non-conformance 2013-01 of 02 (Minor non-conformity): There was an underaged worker found on the list of workers at ME 4 estate, who was recruited on April 1, 2013. It was stated on the working agreement his date of birth is May 20, 1995. Correction: There is no corrective action taken, because the employee already resigned on 6 August 2013 without prior notice to the company. Preventive Action Plan : To revise SOP-AGR-012 R00 Rekrutmen Karyawan by adding some requirements as follow: a) Human Capital Department (HCD) in Jakarta must examine worker data correctly and the data must

be complete. The hiring of underage workers must be delayed until the age is reach 18.

b) Personnel and General Service Assistant (PGS) in the location (site) must reject the placement of un-derage workers and delay the employment of workers with incomplete data as required according to regulation/law. Delaying of recruitment process must be completed with relevant documents and re-cruitment process records must be well archived.

c) To revise the existing SOP to include new worker handover process from Human Capital Department in Jakarta and Personnel and General Service Assistant in the location (site). It will show that the handover must be accompanied by complete worker data and examination process held by Personnel and General Service Assistant in the location (site).




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Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of im-plementation to verified at next audit.

Criterion 7.7. (Minor indicator 1): Presence of appropriate fire extinguishers and facilities, de-pending on the fire risks.

Non-conformance 2013-02 of 02 (Minor non-conformity): The company provided infrastructure to prevent fire on land clearing/new planting area, such as water tanks and plastic pails, however these will not be effective to prevent potential fire which may spread from nearby community land, which is cleared by burning. Correction: To prepare additional fire prevention infrastructure, such as sign boards explaining prohibitions on burning and impacts, sacks, cleavers, water tanks and shovels. Corrective Action: a) To identify the land owners adjacent with the company’s land.

b) To provide awareness regarding fire hazards to surrounding local communities.

c) To conduct patrols in the areas with potential fire hazards

d) To communicate to the land owners to carry out preventive action against land burning. If action fails to be taken, the company will ask the land owner to inform about the land burning plan, so the com-pany can prepare the safety tools and monitor

Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of im-plementation to verified at next audit.

3.3. Description of Supply Chain Management System

PT Dharma Satya Nusantara Palm Oil Mill (POM 3) is located in Long Kejiak 3 – PT Dharma Intisawit Nugraha (PT DIN), East Kutai District, East Kalimantan Province. The mill was established in October, 2011 with a production ca-pacity of 60 tonnes FFB/hours (2 x 30 tonnes FFB/hours). In year 2012, PT Dharma Satya Nusantara mill is receiving approximately 69.12% (219,317.51 ton) of its supplies of Fresh Fruit Bunches (FFB) from 6 company-owned estates (Melenyu 1 - 3, Long Kejiak 1 - 3 estate) and the remaining 28.90% (91,688.28 ton) from other sister company (PT Swakarsa Sinarsentosa and PT Dharma Agrotama Nusantara). There are smallholders groups supplying FFB to the mill in year 2012 with volume of 6,290.63 tonnes (1.98%). In July 2013, total FFB received by PT Dharma Satya Nusantara mill (POM 3) is 194,332.28 tons such as FFB received of which is came from company’s owned estate 159,458.31 ton (82.06 %), other sister company is 26,068.20 tons (13.41%) and smallholder scheme is 8,805.77 ton (4.53%). The mill produces Crude Palm Oil and Palm Kernel. PT Swakarsa Sinarsentosa has been RSPO certified (RSPO P&C certificate number 18501994 001 (valid from 2013-01-10 to 2018-01-09)) so PT Swakarsa Sinarsen-tosa’s FFB received by PT DSN mill (POM 3) is FFB certified.

The CPO from PT DSN POM 3 produced will be transferred to the company’s Labanan bulking station (± 200 km from mill location) through a temporary storage tank (Tank 300) in Miau baru village. CPO from mill storage tank will be transfer by road tanker to Tank 300 then transfer to Labanan Bulking station by road tanker, final dispatch in Labanan Bulking station to buyer destination according to delivery order documents issued by commercial division in Jakarta Head Office.

The company implements SCC-RSPO with “Mass Balance” model according to the nature of mill FBB supply condi-tion. The following is a description of the company’s supply chain management system according to the RSPO SCCS requirements, including status of compliance of the company and their outsourced third parties to RSPO SCCS re-quirements. Results of assessment according RSPO SCC standard (November 2011) is as described below. During this 1st supply chain certification audit company can demonstrate their compliance to RSPO-SCCS requirement and there was no identified non conformity relating to RSPO SCCS.




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1. Documented procedures

Findings :

The company has a procedure for implementation of SCCS requirements. There are a set of existing working instructions consist of 82 working instructions from incoming FFB until product dispatch as listed on “master list document” such as IK-AGR-STD-04-R02 “Traceability of CPO and PK product” issued on July,01 2013 for all mills under PT DSN group in Muara Wahau region while the incoming order procedure is handle by the trading department in Jakarta Head Office, and includes work instructions named IK-AGR-PRO-01-R02 “Weighbridge” issued on February 20, 2013, IK-AGR-DIS-01-R00 “Receipt, Unloading and Loading in Transfer and Dispatch Tank” issued on June 03, 2013, IK-AGR-DIS-03-R00 “Transport of Kernel” issued on August 01, 2012, IK-AGR-LAB-01-R02 “Grading” issued on February 20, 2013. The company implements a quality management system ISO 9001:2008 as a part of compliance to this standard, the company has to establish complete and up to date standard operation procedures.

The name of the persons having overall responsibility for and authority over the implementation of these re-quirements and compliance with all applicable requirements has been assigned at the audit time for all PT DSN POM (include POM 3). According to Internal Correspondence letter No. 0065/MS/VIII/2013 issued on July 01 2013 (signed by POM Head and Commercial Department Head) that the company assigned the POM Head, Mill Head, Assistant of Leader, assistant of production support, weighbridge operator, foreman of production, foreman of dispatch, mandor of CPO unloading, dispatch head, assistant of dispatch station, assistant of leader for distribution and security as Persons in Charge (PiCs) for SCCS program implementation in mill. Whereas in Commercial Department is bulking head, bulking staff/operator, weighbridge operator, unloading crew, admin-istration & GA bulking, warehouse staff, administrator in Samarinda and commercial staff as Persons in Charge (PiCs) for SCCS program implementation in commercial department.

PT Dharma Satya Nusantara Palm Oil Mill (POM 3) has mechanism to receive FFB both from certified sources and non-certified sources i.e IK-AGR-STD-04-R01 (Traceability of CPO and PK product). Compliance status: Full Compliance

2. Purchasing and goods in

Findings:

PT Dharma Satya Nusantara Palm Oil Mill (POM 3) has mechanism to receive FFB both from certified sources and non-certified sources. The document to be verified from certified sources are: FFB delivered slip (‘Nota Pengiriman Buah’) FM-OLP-33-R00 including wet stamp from the origin estate and certified code. Certification status of the FFB will be stated on ‘Incoming FFB received’ documents in Weighbridge location as seen from sample documents e.g. Material Receipt notes (‘Nota Penerimaan Buah’ FM-PRO-01-R00, and FFB Grading Report (‘Laporan seleksi buah’).

A person has been appointed to be responsible to check and ensure the FFB quality and quantity is as per pur-chase documents.

According to incoming FFB working instruction, when receiving RSPO certified palm oil, personnel located at the material unloading ramp are to verify the claimed category of the material under the mass balance system, supplier supply chain certification number, and quality and quantity of products

Since SCCs has new requirement for SCC (IK-AGR-STD-04-R02 section II – point 10), the company has mechanism to inform the CB immediately if there is a projected overproduction. Compliance status: Full Compliance

3. Records Keeping

Findings:

The company has established a mechanism for control and maintenance of the document and data control pro-cedure No. SOP-AGR-STD-01-R04 issued on January 2, 2012 following ISO 9001: 2008 requirement where retention time for records and reports (recapitulation of daily receipt FFB, daily production report, recapitulation




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of daily dispatch CPO & PK) has defined for at least for five (5) years. The storage and maintenance of docu-ments is the responsibility of the respective departments.

The mill has record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO & PK on daily basis. The material balance includes information about incoming FFB from certified sources and non-certified sources of FFB processed, CPO and PK production result, OER and KER; delivered CPO and PK, balance stock and information about percentage of content of certified material in CPO or PK production on dai-ly base and mass balance on three-monthly basis for CPO & PK product.

All volumes of palm oil that are delivered are deducted from the material accounting system according to actual daily conversion ratios. The material balance can show deliver product sales from a positive stock.

The organization has SCCS software so information about volume of production, volume of stock of product and percentage of mass balance at each location (include location of transit (transfer tank 300, transfer tank 30, warehouse PK in Muara Wahau), volume of dispatch at each location is regularly integrated and updated.

There are no outsourced supply chain processes in PT Dharma Satya Nusantara Palm Oil Mill. Compliance status: Full Compliance

4. Sales and Good Out

Findings :

The sales and goods out mechanism of the company are described in their procedure of sales of palm oil. Rec-ords for next CSPO product sold are recorded in material balance sheet.

CPO products dispatched from PT Dharma Satya Nusantara Mill (POM 3) in Muara Wahau District transported to Labanan Bulking station (route : mill – transfer tank 300 – transfer tank 30 – Labanan bulking) accompanied by documents such as : - Weighbridge ticket (WB ticket) includes data about: Reference Number, date issued, Delivery Order number,

Contract Number, buyer name including the address of buyer, product + supply chain model, the quantity of the products delivered and reference to related transport documentation.

- Delivery Order includes information about buyer address - ‘Surat Pernyataan Truck/ Tangki Bersih’ (statement of clean tank) - Form "Berita Acara Analisa Mutu" (Note of Quality Analysis) - Form of Vehicle Control - ‘Bukti Ekspedisi’ (Evidence of Expedition) FM-DIS-01-R00 - ‘Surat Jalan Kapal’ (Shipment letter), Bill of Landing (B/L) & minute of handover product (Berita Acara Penye-

rahan Produk) (especially from Labanan bulking to end user) where include information about: reference number, date issued, name of buyer including the address of buyer, product + supply chain model, the quanti-ty of product delivered and reference to related transport documentation.

PK products dispatched from PT Dharma Satya Nusantara Mill (POM 3) in Muara Wahau District transported to Warehouse in Samarinda (route : mill – warehouse in SWA - Muara Wahau port – warehouse in Samarinda) or to PT DSN mill (POM 4 (PKO) accompanied by documents such as : - ‘Bukti Ekspedisi’ (Evidence of Expedition) FM-DIS-01-R00 - Delivered slip (Nota Pengiriman) (FM-PRO-16-R00) includes data about: reference number, date issued,

product, destination, product + supply chain model, the quantity of the products delivered and reference to re-lated transport documentation. This slip is used for delivery kernel from Muara Wahau port to warehouse in Samarinda.

- Letter of handover product / transport (Surat Jalan Mobil). This slip is used for delivery kernel from Muara Wahau port to warehouse in Samarinda.

PK products dispatched from the warehouse in Samarinda are transported to the end user accompanied by documents such as : - Weighbridge ticket - Letter of handover (‘Surat Jalan’) (FM-COM-07-R00) includes data about : reference number, date issued, ex-

isting location from product, delivery destination, product + supply chain model, contract number, the quantity of the products delivered and reference to related transport documentation.

Compliance status : Full Compliance




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5. Training

Findings:

PT Dharma Satya Nusantara mill (POM 3) has training procedure and annual training program for their employ-ees, such as training program for year 2013. An SCCS training was done on January 14, 2013 attended by 7 operators in Labanan bulking, the training on SOP and work instructions related SCCS in mill was done on 7, 2013, while an SCCS training for the company’s warehouse in Samarinda was done on July 22, 2013 as seen from training records such as attendance lists, training evidence and photographs. Compliance status: Full Compliance

6. Claims

Findings:

The company has not yet prepared a procedure for certified product communication and claim according to RSPO requirements as they have not made any claims yet. According to product traceability instruction, the mill will only make claims regarding the use of or support of RSPO certified palm oil that are in compliance with the RSPO Rules for Communication and Claims after SCCS certificate is issued. This will confirmed during the next audit. Compliance status : Compliance with observations

3.4 Issues Raised by Stakeholders and Findings Pertaining to Issues A) Issues Raised during Stakeholder Consultation Meeting

No. Issues Raised Management Response Audit

Verification 1 The organization is in compliance with laws

and regulations related to manpower such as: Minimum wage Provision and payment of JAMSOSTEK (so-

cial security for labourers) Submission of JAMSOSTEK’s report to

Manpower and Transmigration local officer Provision of equal employment opportunities

to the local community members compared to members of other communities (such as contractors)

Provision of OHS committee

In year 2013, the organization represented East Kalimantan Province as an example of the best of coach for women workers.

The organization has not achieved the Zero Ac-cident award because accidents have occured before.

The organization will consist-ently continue what has been done.

Appreciation for the organiza-tion to represent the East Kali-mantan Province.

The organization will consist-ently implement the OHS cul-ture and determine the root causes for every accident

Please refer to verification re-sult on CR 4.7 and CR.6.5 un-der section 3.1

2 The organization is in compliance with laws and regulations related to the plantation opera-tions, such as : Has carried out the business plantation as-sessment (‘Penilaian Usaha Perkebunan’) for

The company will not carry out land clearing before it has a permit to do so.

Implementation of scheme

Please refer to verifica-tion result for CR 2.1 under section 3.1




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estate and mill, with result being “good”. Has a land clearing permit for PT Dewata Sawit Nusantara. According to Ministry of Ag-riculture decree No.26 year 2007 regarding land allocated for scheme smallholder area have to be excluded from the company’s HGU area.

Communities in Muara Wahau sub district do not recognize the company’s boundaries with communities land.

smallholder was appropriate with Ministry of Agriculture de-cree No. 26 year 2007.

3 The organization is in compliance with laws and regulations related to environment, such as: Has submitted environmental report for Se-

mester I of year 2013 (include manifest re-port for hazardous waste)

The environmental agency has conducted inspections periodically, with the last inspec-tion on March 27, 2013, and results were “good”.

Until now, the environmental agency has not received complaint from the public/society relating to environment impats from DSN group’s subsidiaries.

The company has been monitoring the environmental conditions by implementing RPL & RKL document. Periodic monitoring result can be used as early warning system to prevent environmental problem and become company’s consideration to improve environmental performance and prevent conditions from worsening.

The company can demon-strate their compliance to requirements stated in their RPL and RKL documents as explained under CR5.1of sec-tion 3.1 above.

3.5 Noteworthy Positive Components

Criterion Comment

8.1 High commitment for RSPO compliance

6.5.1 Water treatment plants are being constructed at several housing areas, e.g. construction sight-ed at Division 4 housing of ME1 estate, and planned for remaining divisions of the estate.

5.6 The company has done a detailed calculation of greenhouse gas emissions and have imple-mented a plan for reduction of greenhouse gases based on this calculation

4.4 Waste water treatment pond with good pumping system and flowering

4.6 Good implementation of company’s procedure regarding prevention of pregnant workers from agrochemical contamination.

2.2 Good system for evaluation of compliances to legal and other requirements.




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3.6. Acknowledgements of Internal Responsibility and Formal Sign-Off by Client It is acknowledged that the assessment visit was carried out as described in this report and we accept the as-sessment findings and report content. Signed on behalf of PT Dharma Satya Nusan-tara Palm Oil Mill 3. T. Notosuroto Management Representative Date: October 11, 2013

Signed on behalf of PT TUV Rheinland Malaysia …………………. Dian S. Soeminta Lead Auditor Date: October 09, 2013




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APPENDICES

Appendix 1: Details of Certificate

Standard: RSPO Principles & Criteria for Sustainable Palm Oil Production; Indonesian National Interpretation: 2008

Certificate Registr. No.: 18502793 001

TUV Rheinland Malaysia Sdn. Bhd. certifies:

Certificate Holder: PT Dharma Satya Nusantara Mill 3, Muara Wahau Village, Muara Wahau subdistrict, Berau district, East Kalimantan, Indonesia and its supply base according to the annex.

Scope: Palm Oil Production and Plantation Management System

An audit was performed, Report No. 18502793. Proof has been furnished that the requirements according to RSPO Principles & Criteria for Sustainable Palm Oil; Indonesian National Interpretation: 2008 are fulfilled.

The due date for all future audits is 25-01 (dd.mm).

Validity: The certificate is valid from 25-03-2014 to 24-03-2019.

The palm oil mill and supply base covered in the certification scope are:

Name of mill / estate

Location GPS locations

Latitude Longitude PT Dharma Satya Nusantara Palm Oil Mil (POM 3)

Muara Wahau Village, Muara Wahau subdistrict, Berau district, East Kalimantan, Indonesia 01 15’ 21.7” N 116 52’ 29.1” E


Melenyu 1 estate Muara Wahau Village, Muara Wahau subdistrict,

Berau district, East Kalimantan, Indonesia 01 15’ 38.4” N 116 52’ 55.2” E

Melenyu 2 estate Miau Baru Village, Muara Wahau subdistrict, Be-

rau district, East Kalimantan, Indonesia 01 17’ 20.2” N 116 46’ 12.5” E


rau district, East Kalimantan, Indonesia 01 16’ 51.9” N 116 43’ 26.8” E


rau dis-trict, East Kalimantan, Indonesia 01°18'29.116"N 116°47'9.919"E


Long Kejiak 1 estate Benhes, Dabeq, Diak Lay and Muara Wahau Vil-lage, Muara Wahau subdistrict, Berau district, East Kalimantan, Indonesia

01 09’ 29.9” N 116 51’ 26.5” E


01 13’ 04.5” N 116 53’ 12.6” E


01 16’ 30.2” N 116 48’ 58.1” E

Kantor Besar Bersama (KBB)

Muara Wahau Village, Muara Wahau subdistrict, Berau district, East Kalimantan, Indonesia 01 10’ 57.9” N 116 49’ 55.7” E




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CPO Tonnage Total Productions*: PK Tonnage Total Productions*: Company Estates FFB Tonnages*: FFB Tonnages from other sources*: CPO Tonnage claimed for certification: PK Tonnage claimed for certification:

79,206 tonnes 9,773 tonnes 219,318 tonnes 97,979 tonnes 82,952 tonnes 10,572 tonnes

* Based on year 2012 total production




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Appendix 2: Certification Audit Plan

Date / Time

(1) Activities Auditor Auditee Remarks

Sunday, 25 August 2013

05.45-08.55

11.00-12.02

12.30-18.00

Traveling Jakarta - Balikpapan

Traveling Balikpapan - Berau

Traveling Berau - Mess

CN,FA,HF,MK,AH,

DSS

- GA 0510

KD 0905

Monday, 26 August 2013 08.00-10.00

Estate Office Opening Meeting

Auditor Tim introduction

Company’s presentation

Tim auditor All Manager

10.00-12.00

Estate Office

Document checking :

RSPO

- Legal compliances

- Legal land

- Responsible to environemnat Biodi-versity

- Continual improvement

HF & DSS

Relevant manager PT DIN

RSPO

Principle 2

Criteria : 2.1.1 (Mj); 2.1.2 (Mj); 2.2.1; 2.2.2;

Principle 5

Criteria : 5.2

Principle 8

Criteria : 8.1

10.00-12.00

RSPO - Transparansy

- Comply to legal regulation

- Land conflict

- Responsibility to workers and com-munity


FD

Relevant Manage-ment PT Dewata

RSPO

Principle 2

Criteria : 2,1.1 (Mj); 2.1.2 (Mj); 2.2.3 (Mj); 2.2.1 (Mn); 2.2.2 (Mn); 2.3;

Principle 6

Criteria : 6,1; 6.2; 6.3; 6.4; 6.5; 6.6; 6.7; 6.8; 6.10, 6.11 Principle 8

Criteria : 8.1

10.00-12.00

Estate Office

RSPO - Legal compliance

- Best Practice Management

- Environmental and Biodiversity Re-sponsibility

- Responsible development of new plantings


MK Management PT De-wata Sawit Nusantara (DWT) and mill

RSPO

Principle 1 Criteria : 1,1; 1.2; Principle 2 Criteria : 2,1.1 (Mj); 2.1.2 (Mj); 2.1.1 (Mn); 2.1.2 (Mn) Principle 4 Criteria : 4.1; 4.2; 4,3; 4.4; 4.7; Principle 7 Criteria : 7.1 s/d 7.7 (kecuali 7.5.3 & 7.6) Principle 8 Criteria : 8.1

10.00-12.00

Estate Office RSPO - Compliance with applicable laws and

regulations

- Use of appropriate practice by grow-ers and miler

- Environmental responsibility and con-servation of natural resources

- Continual Improvement

CN Estate manager PT Dharma Intisawit Nugraha (DIN) and mill

RSPO Principle 2 Criteria : 2,1.1 (Mj); 2.1.2 (Mj) Principle 4 Criteria : 4.5; 4.8 Principle 5 Criteria : 5.1; 5.3; 5.4; 5.5; 5.6 Principle 8 Criteria : 8.1

10.00-12.00

Estate Office RSPO - Compliance with applicable laws

and regulations - Best Practice Management


- Responsible

AH Estate Manager Dharma Intisawit Nugraha (DIN) and

RSPO

Principle 1 Criteria : 1,1; 1.2; Principle 2 Criteria : 2,1.1 (Mj); 2.1.2 (Mj); 2.1.1 (Mn); 2.1.2 (Mn) Principle 4 Criteria : 4.1; 4.2; 4,3; 4.4; 4.6; 4.7;




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Date / Time


- Continual improvement Principle 8 Criteria : 8.1

12.00-13.00 Break and pray All Auditor

13.00-17.00 Continue docment check All Auditor

17.00 End of 1st day audit

Tuesday, 27 August 2013

08.00-12.00

Relevant Es-tate

RSPO - Compliance with applicable laws

and regulations

- Legal land - Responsibility to workers and

community


HF

Estate Manager PT Dewata Sawit Nusan-tara (DWT)

RSPO

Principle 2

Criteria : 2.1.1 (Mj); 2.1.2 (Mj); 2.2.1; 2.2.2;

Principle 5

Criteria : 5.2

Principle 8

Criteria : 8.1

08.00-12.00

Relevant Es-tate

RSPO - Transparancy

- Compliance with applicable laws and regulations

- Land dispute resolution

- Best Management Practice for mill and estate

- Traditional right


- Continual improvement - Environmental and Biodiversity Re-

sponsibility

FD

Estate manager PT Dewata Sawit Nusan-tara (DWT)and mill Pabrik

RSPO

Principle 2


Principle 6

Criteria : 6,1; 6.2; 6.3; 6.4; 6.5; 6.6; 6.7; 6.8; 6.10, 6.11 Principle 7 Criteria : 7.5; 7.6 Principle 8

Criteria : 8.1

08.00-12.00

KBB RSPO - Compliance with applicable laws and

regulations

- Best Management Practice for plan-tationa and estate




MK Estate manager PT Dewata Sawit Nusan-tara (DWT) dan Pabrik

RSPO

Principle 1 Criteria : 1,1; 1.2; Principle 2 Criteria : 2,1.1 (Mj); 2.1.2 (Mj); 2.1.1 (Mn); 2.1.2 (Mn) Principle 4 Criteria : 4.1; 4.2; 4,3; 4.4; 4.6; 4.7; Principle 7 Criteria : 7.1 s/d 7.7 (kecuali 7.5.3 & 7.6) Principle 8 Criteria : 8.1

10.00-12.00

KBB RSPO - Compliance with applicable laws

and regulations




CN Estate manager PT Dewata Sawit Nusan-tara (DWT) and mill

RSPO Principle 2 Criteria : 2,1.1 (Mj); 2.1.2 (Mj) Principle 4 Criteria : 4.5; 4.8 Principle 5 Criteria : 5.1; 5.3; 5.4; 5.5; 5.6 Principle 8 Criteria : 8.1




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Date / Time


10.00-12.00

KBB RSPO - Transparancy





DSS & AH Estate Manager Dharma Intisawit Nugraha (DIN) dan Pabrik

RSPO

Principle 1 Criteria : 1,1; 1.2; Principle 2 Criteria : 2,1.1 (Mj); 2.1.2 (Mj); 2.1.1 (Mn); 2.1.2 (Mn) Principle 4 Criteria : 4.1; 4.2; 4,3; 4.4; 4.6; 4.7; Principle 8 Criteria : 8.1

12.00-13.00 Break All Auditor

Continue morning agenda All Auditor

17.00 End of 2nd day audit

19.00-22.00 Stakeholder Consultation

Wednesday, 28 August 2013

08.00-12.00

PT DWT

Verifikasi lapangan untuk :

RSPO




- Traditional right

- Responsibility to workers and community


- Environmental and Biodiversity Responsibility

HF

Estate Manager PT Dewata Sawit Nusan-tara (DWT)

RSPO

Principle 2

Criteria : 2.1.1 (Mj); 2.1.2 (Mj); 2.2.1; 2.2.2;

Principle 5

Criteria : 5.2

Principle 8

Criteria : 8.1

RSPO - Transparancy




- Traditional right




FD

Estate manager PT Dewata Sawit Nusan-tara (DWT) dan Pabrik

RSPO

Principle 2


Principle 6

Criteria : 6,1; 6.2; 6.3; 6.4; 6.5; 6.6; 6.7; 6.8; 6.10, 6.11 Principle 7 Criteria : 7.5; 7.6 Principle 8

Criteria : 8.1

08.00-12.00

PT DWT RSPO - Compliance with applicable laws and

regulations




MK Estate Manager RSPO


08.00-12.00

PT DIN


and regulations

CN Estate Management RSPO Principle 2 Criteria : 2,1.1 (Mj); 2.1.2 (Mj)




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Date / Time





Principle 4 Criteria : 4.5; 4.8 Principle 5 Criteria : 5.1; 5.3; 5.4; 5.5; 5.6 Principle 8 Criteria : 8.1


and regulations




AH Estate Management RSPO



13.00-17.00 Continue morning agenda All Auditor

17.00 End of 3rd day audit

Thursday, 29 August 2013

08.00-12S

RSPO


- HCV area


HF - Mill Manager RSPO Principle 2 Criteria : 2.1; 2.2 Principle 5 Criteria : 5.2 Principle 8 Criteria : 8.1

RSPO

- Transparancy




- Traditional right




FD - Mill Manager

ISPO

Principle 1

Criteria : 1.9

Principle 4

Criteria : 4.2; 4.3;

Principle 5

Criteria : 5.1

Principle 6

Criteria : 6.1

Principle 7

RSPO Principle 2 Criteria : 2.1 Principle 6 Criteria : 6.1.1; 6.5; 6.6; 6.10; 6.11 Principle 8 Criteria : 8.1

RSPO


-




AH - Mill Manager

RSPO Principle 1 Criteria : 1.1; 1.2 Principle 2 Criteria : 2.1 Principle 8 Criteria : 8.1

RSPO



CN - Manager Mill

RSPO Principle 2 Criteria : 2.1 Principle 4 Criteria : 4.5, 4.8 Principle 5




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Date / Time




Criteria : 5.1; 5.3; 5.4; 5.5; 5.6 Principle 8 Criteria : 8.1

RSPO P&C

- Transparancy




RSPO SCCS

- Module E (CPO Mill : MB)

DSS - Mill Manager RSPO P&C Prnsip 3 Criteria : 3.1 Principle 6 Criteria : 6,9; Principle 8 Criteria : 8.1 RSPO SCCS 5.1 s/d 5.6 dan E.1 s/d E.6

08.00-12.00

PT DWT

Verifikasi lapangan & cek dokumen


and regulations


- Traditional right



MK - Estate Manager

ISPO

Principle 2

Criteria : 2.1 (2.1.1 s/d 2.1.8 (kecuali 2.1.3); 2.2 (2.2.1 s/d 2.2.7)

Principle 3

Criteria : 3.1; 3.2; 3.3; 3.4; 3.6; 3.7

Principle 4

Criteria : 4.1; 4.4

RSPO



13.00-17.00 Continue morning agenda All Auditor


Friday, 30 August 2013 08.00-12.00

PT DIN

RSPO

- Transparancy




- Traditional right




-

HF

Manajemen Kebun RSPO

Principle 2

Criteria : 2.1.1 (Mj); 2.1.2 (Mj); 2.2.1; 2.2.2;

Principle 5

Criteria : 5.2

Principle 8

Criteria : 8.1

08.00-12.00

PT DIN RSPO

- Transparancy



- Best Management Practice for

FD

Manajemen Kebun RSPO

Principle 2


Principle 6

Criteria : 6,1; 6.2; 6.3; 6.4; 6.5; 6.6; 6.7; 6.8;




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Date / Time


mill and estate

- Traditional right




-

6.10, 6.11 Principle 7 Criteria : 7.5; 7.6 Principle 8

Criteria : 8.1

08.00-12.00

PT DWT RSPO






-

MK Manajemen Kebun

RSPO


08.00-12.00

PT DWT RSPO






-

CN Manajemen Kebun RSPO Principle 2 Criteria : 2,1.1 (Mj); 2.1.2 (Mj) Principle 4 Criteria : 4.5; 4.8 Principle 5 Criteria : 5.1; 5.3; 5.4; 5.5; 5.6 Principle 8 Criteria : 8.1

08.00-12.00

PT DIN RSPO






-

AH Manajemen Kebun RSPO


08.00-12.00

PT DWT

RSPO P&C

- Transparancy





DSS Manajemen Kebun RSPO P&C Prnsip 3 Criteria : 3.1 Principle 6 Criteria : 6,9; Principle 8 Criteria : 8.1


13.00-17.00 Continue Morning Agenda All Auditor


18.00-19.00 Preparing for Closing Meeting All auditor

19.00-20.00 Closing meeting All auditor

Saturday, August 31, 2013




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Date / Time


05.00-11.00 Traveling Wahau to Berau All auditor

13.00-14.000 Traveling Berau -Jakarta All auditor Kalstar or Lion …

17.00-19.00 Traveling Jakarta-Balikpapan All auditor By GA…




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Appendix 3: List of Abbreviations AMDAL CSR

Analisis Dampak Lingkungan & Sosial (Social & Environmental Impacts Assessment) Corporate Social Responsibility

CPO Crude Palm Oil EIA Environmental Impact Assessment ERTs Endangered, Rare & Threatened species EHS Environmental Health &Safety FFB Fresh Fruit Bunches EFB Empty Fruit Bunches EWS HCD

Early Warning System Human Control Department

HCV HGB

High Conservation Value Hak Guna Bangunan (Building Permit)

HIRARC Hazard Identification, Risk Assessment and Risk Control GHG KBB

Green House Gas Kantor Besar Bersama (Head Estate Office)

KER Kernel Extraction Rate IPM IUP

Integrated Pest Management Ijin Usaha Perkebunan (Plantation Business Permit)

LTA LK

Lost Time Accident Long Kejiak

MSDS ME

Material Safety Data Sheets Melenyu Estate

NGO Non-Government Organization OSH PT DSN

Occupational Safety & Health PT Dharma Satya Nusantara

PT DIN PT Dharma Intisawit Nugraha PT DWT P2K3

PT Dewata Sawit Nusantara (Petugas penanggung jawab Kesehatan, dan Keselamatan Kerja)/ Occupational Safety & Health Team

PGS Personel and General Support PK Palm Kernel PKO Palm Kernel Oil POM Palm Oil Mill POME Palm Oil Mill Effluent PPE Personal Protective Equipment OER Oil Extraction rate RKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) SIA SPK

Social Impact Assessment Surat Perjanjian Kerja (Working Agreement)

SOP Standard Operating Procedure UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL Upaya Pengelolaan Lingkungan (Environmental Management Efforts)




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Appendix 4: List of Stakeholders Interviewed and Contacted

No. Name of

Stakeholder Institution / Position Remarks

Stakeholders Interviewed during Public Consultation Meeting

1. Wartoyo

Manpower section office Kutai Timur District

2. Syahriansyah Plantation License Kutai Tmur 3. Akmaludin Plantation officer Kutai Timur 4.

Herry Yuli Environmental Local Office (Badan Lingkungan Hidup Daerah)

5. E.A. Rafiddin Rizar

Environmental Local Office (Badan Lingkungan Hidup Daerah)

6. Husni Hasan Lincese officer Kutai Timur 7. Bony Briks Planning section 8. Kejepkoeq Head of KSU Kejiak 9. Dwi Harto Head Cooperation Long Bau 10. Avion Usal Villager 11. Bengiut Villager 12. Lingda Villager 13. H. Seng Villager 14. Wahay Villager 15. Damus Villager 16. Dorti Villager 17. Meti Villager 18. Irwan Miau Baru Village 19. Jalang Alung Long Baru Village 20. Japarman Long Baru Village

Stakeholders Interviewed On-Site

1.

Mr Bambang Hadi Purwanto

Plantation Head of PT DWT

Best practice management, riparian buffer zone protection, land clearing activities, terrace application for hilly area, HCV area, safety and health

2.

Mr Maryadi Head of Melenyu 2 Estate

Spraying activities, Harvesting activities, riaprian protection, and HCV area, IPM and safety and health

3. Mr Yurizarman

Head of Melenyu 1 Estate Harvesting activities and riparian protection

4.

Mr Jefri

Head of Melenyu 3 Estate Spraying actvities, harvesting activities, IPM, riparian protection, safety and health

5.

Mr Anjar

Head of Melenyu 4 Estate Terrace application on hilly area, cover crops cultivation in new planting, riparian protection and HCV area

6.

Mr Anam

Safety and Health Officer of PT DWT Safety and health for all activities, hazardous waste management, housing, riparian buffer protection, HCV area




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7.

Mr Yohanes, Mr Eko, Mr Sirait

Foreman for spraying activities in Block G46 Division 12 Melenyu 2; Foreman and Division Assisstant for spraying activities in Block E25 Division 15 Melenyu 3

Chemical handling, first aid knowledge, medical chekup, riparian protection, PPE’s, best management practice for chemical application

8. Mrs Surip, Mrs Walmiyati, Mrs Sartijah, Mrs Satini, Mrs Parimah, Mrs Wartiah

Sprayer in Block G46 Division 12 Melenyu 2 and Block E25 Division 15 Melenyu 3

Chemical handling, first aid knowledge, medical chekup, riparian protection, PPE’s, best management practice for chemical application

9. Mr Ali Mustofa, Mr Suparno

Harvesting in Block F45, Division 2 Melenyu 2 estate and Block 27/28 Division 15 Melenyu 3

Good harvesting, PPE’s, harvesting rotation, safety and health, HCV

10. Karsiah Sprayer safety and health 11. Panikem Sprayer safety and health 12. Titi Trisnawati Sprayer safety and health 13. Rita Sprayer safety and health14. Beni Land Clearing Contractor Training, safety and health 15. Sigit Land clearing Contractor Training, safety and health 16. Toni Gunawan Operator Training, safety and health 17. T. Notosuroto Management Representative 18. Fajar IE O5-BP 19. Watik TK Management System 20. Ekoariawan Koordinator PKS 21. Hapsoro AY SHE 22. Ardiansyah SHE 23. Dadam S SHE 24. Juber S Conservation 25. Wisnu P Conservation 26. Suyitno SR PH DIN 27. Riyadi W POM Head 28. Imam Giyanto Legal 29. Helmizaldi MH 30. Isharyadi PKS4 31. Ari Subandono PTC-HCD 32. Dolok Siahaan Long Kejiak 3 33. Bambang S KM DIN 34. Ansory Djohandes LK2 35. Dheni Lukita LK2 36. Jhonaes LK 3 37. Roni Dicky P LK1 38. Agus Sarbani PKS 3 39. Renny K Management System 40. Fidyatullah

Pradma HC Development

41. Dani Nugraha HCD 42. SM Sirait PKS3 43. Taufik CSR 44. Kokok Budiyanto CSR 45. Suryansah CSR 46. M. Anwar SHE Dewata Sawit 47. Bambang HP PH Dewata Sawit 48. Yaryo DM Melenyu Dewata 49. Yulizarman Melenyu Dewata




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50. Sahala Jefrey ME3 Dewata 51. Eko Nugroho Dewata sawit 52. Edwin Apriandi SHE 53. Khaula Inayati Management System

Appendix 5: Observations and Opportunities for Improvement

No. Observations / Opportunities for Improvement Criteria1. The company has still not informed to other stakeholders such as suppliers, local institu-

tions, non-government organizatons (NGOs) and other relevant stakeholders regarding documents that can be accessed, even though management informed that all documents will be attached on the company’s website.

1.2

2. Information for GHG calculation should more accurate, taking actual data from the field(Fertilizer consumption)

3.6.2

3. There is a letter from R&E Department for Melenyu 3 estate regarding recommendations to improve the condition of yellowed palms at ME3 estate through using ‘horseshoe’ meth-od at sloped areas, and additional application of EFB and urea. However, there was no fol-low up on this recommendation

4.2.2

4. For PT DWT, land application of EFB is only carried out at ME3 estate and there is a schedule for recommended amount to be applied to each block in year 2013, however EFB application is not done exactly according to the program. For example, program stat-ed 8 ha at block F37B, and 8ha at block D18 of the estate is to be applied with EFB but this was not due to poor road conditions, so EFB application was done at other blocks with was scheduled for EFB application at a later date, e.g. 10 ha at blok F37A was applied in January although program was for November 2013

4.2.2

5. Very poor road conditions observed at some areas of ME4 estate which is still undergo-ing new plantings. The roads are located at areas where no plantings are planned for but is near to a river.

4.3

6. The existing MSDS should be visible and readable clearly. 4.6

7. Washing area for PPE at LK1 estate has no separate shower area for sprayers. Spray-ers wash and store their PPE and spraying equipment at the washing area but shower at their homes located nearby

4.7.6

8. Sprayer’s PPE washing area at LK1 estate is not enclosed or locked to prevent young children from nearby from entering and potentially falling into the sumps or injuring themselves. There is only a warning signboard telling young children not to enter.

4.7.6

9. Betadine bottle sighted in first aid kit of sprayer’s mandore at ME1 estate and workshop of ME1 estate had no expiry date.

4.7.6

10. The company does not provide first aid kits at child day care centres 4.7.7

11. The companies should ensure that risk assessment and safety or Job Analysis is con-ducted for all routine and non-routine activities that are related indirectly to operational plantations of the Palm Oil Mill (example case the opening of land activities, transport school children, selling premium gasoline, etc.).

4.7.3

12. Instruction for activities such as “gasoline store” in the housing area still not available. 4.7.3

13. Some empty chemical containers were sighted kept in the LK1 estate, Division 1 store but not disposed as hazardous wastes. The estate management took immediate action to dis-pose the chemical containers and evidence was seen from photos of the store and the hazardous waste inventory for LK1 estate which shows 15 pieces of chemical containers were sent to the hazardous waste store on 29/8/2013.

5.3

14. Hazardous waste handling procedure has not been communicated to the security team, as front line for environmental, safety and health disturbance.

5.3.1

15. The workers have lack of understanding of HIRARC and Workpermit 5.3.1

16. Emergency and response procedure has no periodic evaluated to ensure all function is well operated.

5.5.1




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17. Mechanisms of complaint handling for workers and gender issues should be clear and easily understood by the users/ workers.

6..3

18. There was found differentiation of salary calculation between daily paid permanent work-ers and monthly paid permanent workers, there is no clear explanation about the basic calculation.

6.5

19. There was found signs of chemicals application at Block F70 where the area was identi-fied as a HCV 4.1 area.

4.5

20. Emergency response and preparedness procedures for new planting areas have not been evaluated.

7.5/5.5.

21. The function of gender committee should be separated from the task of workers unions. It was sighted in meeting minutes of worker unions that gender issues are regularly dis-cussed rather than other problems.

6.7

22. Contractor employees data who work in mill 3 PT DSN, PT DIN and PT DWT are not available or kept up to date.

6.5

23. The company should incorporate mechanisms for archiving or backing-up data of SCCS applications (soft copy) in procedures or work instructions.

SCCS

E.3.1

roundtable on sustainable palm oil...qmf: rspo-007a-13(rev.0) 1.5 dates of plantings and replanting...

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